Fiscal Policy and Monetary Policy

What are business cycles based on?

• Stock market trends

• Consumer confidence surveys

• GDP and natural ups and downs of the economy

• Interest rates set by the central bank

What is the purpose of Fiscal Policy?

• To regulate the stock market

• To use government spending and revenue collection to influence the economy

• To set interest rates for banks

• To control the money supply

Who controls fiscal policy?

• State Government

• Federal Government

• Local Government

• International Organizations

Who are the two parts of the Federal Government that control fiscal policy? (pick 2)

• Congress - Senate and House of Representatives

• Legislative Branch

• President

• Judicial Branch

Which of the following is NOT a main goal of fiscal policy?

• Strong and sustainable economic growth

• Boost the economy (end high unemployment)

• Slow the economy (end high inflation)

• Decrease national defense

What is one of the main goals of fiscal policy to address high unemployment?

• Increase taxes

• Boost the economy

• Cut healthcare spending

• Raise interest rates

What is a goal of fiscal policy when facing high inflation?

• Increase government spending

• Reduce taxes

• Slow the economy

• Increase subsidies

What is one of the objectives of using fiscal policy?

• To decrease economic growth

• To achieve economic growth

• To increase unemployment

• To destabilize prices

Which of the following is NOT a goal of fiscal policy?

• Full employment

• Price stability

• How much to spend

• How much to tax

What is the purpose of expansionary policies in economic terms?

• To decrease production

• To stimulate the economy

• To slow the economy

• To raise taxes