USG 6.2

What is fiscal policy primarily concerned with?

• Regulation of money supply

• Government spending and taxation

• International trade policies

• Corporate regulations

Which entity is primarily responsible for implementing monetary policy in the United States?

• The President

• The Congress

• The Federal Reserve

• The Treasury Department

What is the main goal of monetary policy?

• To ensure low unemployment rates

• To control inflation

• To balance the federal budget

• To increase international trade

Which of the following is a tool of fiscal policy?

• Interest rates

• Government bonds

• Tax rates

• Currency valuation

How does an increase in government spending affect the economy?

• It decreases consumer spending

• It increases overall economic demand

• It reduces the national debt

• It lowers inflation rates

What does the Federal Reserve do to combat high inflation?

• Decreases interest rates

• Increases interest rates

• Increases government spending

• Decreases taxation

Which of the following is an example of an expansionary fiscal policy?

• Increasing taxes

• Decreasing government spending

• Increasing government spending

• Selling government bonds

What is the purpose of contractionary monetary policy?

• To decrease the money supply and reduce inflation

• To increase the money supply and stimulate economic growth

• To decrease government spending

• To reduce the national debt

Which of the following would be considered a fiscal policy action?

• Lowering the reserve requirement for banks

• Raising income tax rates

• Changing the discount rate

• Open market operations

What effect does decreasing interest rates have on the economy?

• It discourages investment

• It slows down economic growth

• It encourages borrowing and spending

• It increases savings