5.1 Fiscal Policy

What is the definition of Fiscal Policy?

• The management of a nation's money supply and interest rates

• The use of government spending and taxation to influence the economy

• The regulation of financial institutions and markets

• The control of inflation through monetary measures

Tags

DOK Level 1: Recall

Who is primarily responsible for making Fiscal Policy in the United States?

• The Federal Reserve

• The President and Congress

• State Governors

• The Supreme Court

Tags

DOK Level 1: Recall

Which of the following is an example of Expansionary Fiscal Policy?

• Increasing taxes

• Reducing government spending

• Increasing government spending

• Raising interest rates

Tags

DOK Level 1: Recall

Which of the following is an example of Contractionary Fiscal Policy?

• Cutting taxes

• Increasing government spending

• Reducing government spending

• Lowering interest rates

Tags

DOK Level 1: Recall

What is the main goal of Supply Side Fiscal Policy?

• To increase consumer demand

• To reduce inflation

• To increase production and supply

• To stabilize the currency

Tags

DOK Level 1: Recall

According to Keynesian Fiscal Policy, what should the government do during a recession?

• Increase taxes

• Decrease government spending

• Increase government spending

• Raise interest rates

Tags

DOK Level 1: Recall

Which of the following best describes the theory behind Supply Side Fiscal Policy?

• Government intervention is necessary to manage economic cycles

• Lower taxes and deregulation will lead to increased production and economic growth

• High government spending is essential for economic stability

• Controlling the money supply is the key to economic growth

Tags

DOK Level 2: Skill/Concept

What is a potential downside of Expansionary Fiscal Policy?

• Increased unemployment

• Higher inflation

• Decreased consumer spending

• Lower economic growth

Tags

DOK Level 2: Skill/Concept

How does Contractionary Fiscal Policy aim to reduce inflation?

• By increasing the money supply

• By reducing government spending and increasing taxes

• By lowering interest rates

• By increasing government subsidies

Tags

DOK Level 2: Skill/Concept

Explain how Keynesian Fiscal Policy can be used to combat unemployment.

• By reducing taxes to increase consumer spending

• By increasing government spending to create jobs

• By lowering interest rates to encourage borrowing

• By increasing the money supply to boost investment

Tags

DOK Level 3: Strategic Thinking