Economic Stabilizers Quiz

What are the two main types of stabilizers mentioned to help the economy?

• Fiscal Policy Tools and Trade Policy Tools

• Monetary Policy Tools and Trade Policy Tools

• Fiscal Policy Tools and Monetary Policy Tools

• Government Spending and Trade Policy Tools

Which of the following is a component of Fiscal Policy Tools?

• Federal Reserve System

• Interest Rates

• Government Spending & Taxation

• Trade Agreements

What does Monetary Policy Tools include?

• Government Spending & Taxation

• Federal Reserve System & Interest Rates

• Trade Agreements

• Import Tariffs

What is the primary purpose of discretionary fiscal policy?

• To maintain constant federal spending and tax levels

• To change federal spending, tax levels, or both

• To reduce national debt

• To increase state taxes

What is the intended effect of discretionary fiscal policy on the national economy?

• To influence national levels of output, employment, and prices

• To stabilize the stock market

• To control state budgets

• To regulate international trade

Which of the following is a characteristic of an expansionary policy?

• Decrease federal spending

• Increase federal taxes

• Increase federal spending

• Increase state taxes

What is the goal of a contractionary policy?

• To control unemployment

• To control inflation

• To increase federal spending

• To decrease federal taxes

Which of the following actions is associated with a contractionary policy?

• Increase federal spending

• Decrease federal spending

• Decrease state taxes

• Increase state spending

Which type of policy is popular and therefore easier to pass legislatively?

• Expansionary policy

• Contractionary policy

• Monetary policy

• Fiscal policy

What does an expansionary policy typically do?

• Increases taxes and decreases services

• Reduces taxes and increases services

• Reduces taxes and decreases services

• Increases taxes and increases services