Monetary and Fiscal Policy

A general rise in prices and goods and services over a period of time (a)  

• Inflation
• Deflation
• Unemployment
• Interest rates

Who controls the monetary policy in the US?

• The Federal Reserve

• The Government

In order to control the money supply in the economy, the Federal Reserve will --

• Increase government spending

• Decrease taxes

• Increase or decrease interest rates

• Build more highways

The federal reserve increases interest rates in order to slow down growth and decrease inflation. The government has implemented (a)  

• Contractionary Monetary Policy
• Expansionary Monetary Policy

The federal reserve decreases interest rates to encourage consumer spending during a recession. The government has implemented (a)  

• Expansionary Monetary Policy
• Contractionary Monetary Policy

When inflation is high, the federal reserve may want to control inflation by

• Increasing loan rates to discourage people from borrowing money

• Decreasing loan rates to encourage people to borrow money

What is the goal of monetary policy?

• Encourage people to borrow money from the banks

• To increase inflation in an economy

• To increase government spending in public services

• achieve maximum employment and keep inflation in check

Which of the following is public service?

• National Defense

• Businesses

• Education

• Roads and highways

When government spending is more than the taxes collected is known as

• Deficit spending

• Budget surplus

• Inflation

• Interest Rates

According to expansionary fiscal policy, if the government wants to stimulate the economy to fuel economic growth, the government will

• Decrease government spending

• Increase taxes

• Increase government spending

• None of the above