Ohio American Government Standard #23 and #24 Fiscal Policy

The two broad categories of fiscal policies are (two answers)

• expansionary

• communism

• capitalism

• contractionary

Expansionary policies involve (two answers)

• higher taxes

• increased government spending

• reduced taxes

• decreased government spending

Contractionary policies involve (two answers)

• decreased government spending

• increased taxes

• decreased taxes

• increased government spending

Government spending and taxing does not produce immediate results.

• T

• F

Expansionary policies could result in inflation and contractionary policies could result in recession.

• T

• F

Fiscal policy is

• decisions the government makes to fight inflation
• actions the the Federal Reservice takes to control money supply
• does not help with inflation

How does the government typically handle taxes and interest rates during a recession?

• It raises taxes and lowers interest rates

• It lowers taxes and raises interest rates

• It lowers both taxes and interest rates

• It raises both taxes and interest rates

If the government raises interest rates, the amount of money the typical consumer has

• increases

• decreases

• stays the same

If the government lowers interest rates, consumer spending typically

• increases

• decreases

• stays the same

If the State of Ohio implements a new form of sales tax, what would happen to the spending habits of most consumers?

• They would spend less.

• They would spend more.