Unit 5/6 Formative Check

Fiscal Policy is controlled by...

• The Government

• The Federal Reserve System

• The states

• The Department of Commerce

The two "tools" of Fiscal Policy are:

• the power to tax

• the power to spend

• the power to borrow money

• the power to print money

If the unemployment rate is rising and GDP is falling, the fiscal policy action that the federal government should MOST likely follow is 

• decreasing taxes.
• decreasing spending.
• decreasing the money supply.
• decreasing the reserve requirement.

If and economy experiences a dramatic rise in prices, which fiscal policy action could be taken?

• Selling securities on the open market
• Raising interest rates
• Reducing government spending
• Raising reserve requirements

When the government raises taxes, what does it take out of circulation?

• Money
• Credit
• People
• Jobs

What makes up the largest area of government spending?

• Food Stamps

• Medicare

• Social Security

• Interest payments

What is Fiscal Policy?

• Use of gov't spending and tax policies to

  influence economic conditions

• A central bank influencing a nation's money supply

Taxing & spending to help the economy grow is referred to as

• expansionary policy
• monetary policy
• contractionary policy
• budget deficit

Taxing & spending to slow the economy is referred to as 

• budget surplus 
• monetary policy
• contractionary policy
• budget deficit

Which of the following are responsible for making fiscal policy decision? 

• The President and Congress
• The Federal Reserve System
• The National Council of Economic Advisors
• The commerce Department