WorksheetsFiscal Policy
Total questions: 25
Worksheet time: 25mins
The two "tools" of Fiscal Policy are:
the power to tax
the power to spend
the power to borrow money
the power to print money
Fiscal Policy is controlled by...
The Government
The Federal Reserve System
The states
The Department of Commerce
The Federal government is concerned that economic growth is too high, that it is unsustainable, and that inflation is resulting. Which of the following fiscal policies might be enacted to reduce inflation?
Increasing taxation
Open market sales
decreasing taxation
Increasing government spending
Taxing & spending to help the economy grow is referred to as
expansionary policy
monetary policy
contractionary policy
budget deficit
Which of the following are fiscal policy tools (select 2)?
adjusting the reserve requirement
adjusting the discount rate
changing government spending
changing income taxes
buying/selling bonds via open market operations
If the federal government gives tax breaks to electric vehicle manufacturers and increases taxes on fossil fuel vehicles, to promote clean energy, this will affect taxing and spending. What kind of economic policy deals with taxing and spending?
monetary policy
social policy
fiscal policy
Fiscal Policy is created by (a) .
The 2 fiscal policy tools are: (b) .
The goal of Contractionary Fiscal Policy is to (c) the (d) line on the Aggregate Model.
congress
taxes & government spending
decrease
AD
the FED
reserve requirement & discount rate
SRAS
increase
Check all that apply: Which TWO graphs show the result of FISCAL policy?
Graph E
Graph A
Graph C
Graph D
Graph AB
Oliverland is experiencing an expansion. Their congress decides to enact a Contractionary Fiscal Policy. A con to this though is (a) which will cause interest rates to (b) as the government (c) (d) and lead to Business Investments and Net exports to (e) , which is the opposite of this policy's goal.
Crowding--Out
decrease
demands less
loanable funds
increase
C(y-t)
G
not change
Inflation is at 4%.
This country is experiencing a(n) (a) The two actions congress could take to fix this are (b) government spending and (c) taxes . This is called (d) .
increasing
decreasing
Contractionary Fiscal Policy
Classical Economics
expansion.
Expansionary Fiscal Policy
recession
Remitopia is experiencing a recession. Their congress decides to enact an (a) Fiscal Policy. Which means they will lower (b) and increase (c) . This will lead to an (d) in Consumer Spending (e) and Government Spending (G).
Expansionary
taxes
government spending
increase
C(y-t)
I(r)
NX(e)
decrease
Contractionary
Oliverland is experiencing an expansion. Their congress decides to enact a (a) Fiscal Policy. Which means they will (b) taxes and (c) government spending . This will lead to a decrease in the (d) Consumer Spending (e) and Government Spending G .
Contractionary
raise
decrease
AD components
C(y-t)
I(r)
NX(e)
Expansionary
Remitopia is experiencing a recession. Their congress decides to enact an Expansionary Fiscal Policy. A con to this though is (a) which will cause interest rates to (b) and lead to Business Investments (c) and Net exports (d) to (e) , which is the opposite of this policy's goal.
Crowding--Out
increase
I(r)
NX(e)
decrease
C(y-t)
G
not change
During a contraction / recession, the Federal Government should use
an expansionary fiscal policy
a contractionary fiscal policy
An example of expansionary fiscal policy would be
cutting taxes.
cutting government spending.
cutting production of consumer goods.
cutting prices of consumer goods.
If the unemployment rate is rising and GDP is falling, the fiscal policy action that the federal government should MOST likely follow is
decreasing taxes.
decreasing spending.
decreasing the money supply.
decreasing the reserve requirement.
If and economy experiences a dramatic rise in prices, which fiscal policy action could be taken?
Selling securities on the open market
Raising interest rates
Reducing government spending
Raising reserve requirements
When the government raises taxes, what does it take out of circulation?
Money
Credit
People
Jobs
What makes up the largest area of government spending?
Food Stamps
Medicare
Social Security
Interest payments
An example of a contractionary fiscal policy would be if:
taxes were cut
the government bailed out GM
the Fed decrease the fed funds rate
taxes were increased
The tools of fiscal policy are...
Interest rates
Taxes and Government spending
Checks and balances
Open market operations
Fiscal policy is actions taken by ______________ to stabilize the economy.
The federal Reserve
The Air force
the government
Wall street
Expansionary fiscal policies are laws aimed at reducing unemployment. How might Congress use expansionary fiscal policy?
Decrease the discount rate
Increase taxes
Decrease government spending
Increase government spending and decrease taxes
Contractionary fiscal policy are law aimed at reducing inflation. How might Congress use contractionary fiscal policy?
Decrease government spending and increase taxes
Decrease taxes
Send stimulus checks to every person in the economy
Increase government spending
Fiscal Policy
A) The use of government spending and taxation to influence the economy
B) The regulation of the money supply by the central bank
C) The control of interest rates by the central bank
D) The management of the national debt by the treasury
