Fiscal Policy Practice

Front

During an economic expansion, the Federal Government should use...

Back

a contractionary fiscal policy

Front

During a contraction/recession, the Federal Government should use

Back

an expansionary fiscal policy

Front

An example of expansionary fiscal policy would be: cutting taxes., cutting government spending., cutting production of consumer goods., cutting prices of consumer goods.

Back

cutting taxes.

Front

If the unemployment rate is rising and GDP is falling, what fiscal policy action should the federal government MOST likely follow? Options: decreasing taxes, decreasing spending, decreasing the money supply, decreasing the reserve requirement.

Back

decreasing taxes.

Front

When the government raises taxes, what does it take out of circulation?

Back

Money

Front

What are the two major fiscal policies?

Back

Expansionary and Contractionary

Front

What is NOT one of the things a government might do as part of an Expansionary Fiscal Policy? Options: Lower taxes, Increase spending, Issue rebates, Cut spending

Back

Cut spending

Front

What is the main job of Congress?

Back

Make laws

Front

When would Congress want to use expansionary fiscal policy?

Back

During periods of high unemployment

Front

Which is an example of an automatic stabilizer?

Back

Unemployment Insurance