Fiscal Policy

If the economy is growing rapidly, home prices are rising sharply, and consumer demand for products is very high. Should the government...

• Increase Aggregate Demand

• Decrease Aggregate Demand

The economy is faced with a severe economic depression; many business are closing as millions of workers are unemployed. Should the government...

• Increase Aggregate Demand

• Decrease Aggregate Demand

Businesses are laying-off workers, consumer spending has fallen for the last four months in a row, and many people are homeless. The government should...

• Increase Aggregate Demand

• Decrease Aggregate Demand

Consumer prices are rapidly rising in the nation, demand for products is on the rise, and the unemployment rate keeps falling. The government should...

• Increase Aggregate Demand

• Decrease Aggregate Demand

Which economic policy would you have recommended to President Roosevelt in 1929?

• Cut Government Spending

• Raise Income tax Rates

• Increase Spending by the Government

• Propose a New Tax on Business

The Employment Opportunity Act, the Environmental Protection Act, and the Pure Food and Drug Act are examples of...

• Federal Laws designed to protect consumers from harm

• The federal government attempts to regulate big business

• Federal laws designed to curb spending by the federal government.

• The federal governments response to changes in the economy.

What is the primary action taken by the federal government when inflation is widespread in the American Economy?

• Raising taxes on foreign governments

• Lowering tariff rates on imported goods

• Raising taxes on individuals and businesses

• Closing all state chartered banks

A major tool of the federal government in using its fiscal policy to promote economic growth and stability is its ability to

• Control the banking system

• Change federal income tax rates

• Manage the supply of currency

• Issue new environmental regulations

The main reason that the federal government would spend more than it collects in taxes during a depression would be to

• Promote Corporate Mergers

• Put More Money Into the Economy

• Encourage competition amongst businesses in the same field

• Lower the tax cuts for businesses

What would be the best title to describe the situation shown in the diagram?

• A description of depression

• A description of inflation

• Why discretionary spending occurs

• Aggregate Demand