Business Cycle, Monetary Policy, and Fiscal Policy

Who is responsible for making fiscal policy decisions? 

• The President and Congress
• The Federal Reserve System
• The National Council of Economic Advisors
• The Federal Open Market Committee

The federal government's overall approach to spending and taxes is called

• The Federal Open Market Committee

• Fiscal Policy

• The Federal Reserve

• Monetary Policy

The headline below indicates which type of policy:

"Fed unleashes another big rate hike in bid to curb inflation"

• Fiscal policy

• Monetary policy

Monetary policy decisions are made by:

• Congress

• Senate

• The Fed

• President

Taxing and spending are tools of

• fiscal policy

• monetary policy

In order to help the economy grow, the government will decrease or lower taxes. This allows people to have more money and buy more goods and services.

• fiscal policy

• monetary policy

What can the government do to slow the economy in order to reduce inflation?

• lower taxes

• raise taxes

• spend more

To help the economy grow, the government can

• increase spending

• decrease spending

• lower the minimum wage

• raise taxes

The action by the FED to adjust the size of the money supply, and to adjust interest rates in order to keep prices down and employment high.

• fiscal policy

• monetary policy

In order to help the economy grow, the FED may lower the reserve requirement, allowing banks to loan more money to people so that they spend more.

• lower

• raise

• ignore

• end