Fiscal Policy

Congress approves a $1 trillion infrastructure bill.

• Expansionary fiscal policy

• Contractionary fiscal policy

• Expansionary monetary policy

• Contractionary monetary policy

Congress raises income taxes.

• Expansionary fiscal policy

• Contractionary fiscal policy

• Expansionary monetary policy

• Contractionary monetary policy

Congress agrees to extend unemployment benefits for another 6 months.

• Expansionary fiscal policy

• Contractionary fiscal policy

• Expansionary monetary policy

• Contractionary monetary policy

The President sends a new round of COVID stimulus checks to households.

• Expansionary fiscal policy

• Contractionary fiscal policy

• Expansionary monetary policy

• Contractionary monetary policy

Which of the following are responsible for making fiscal policy decision? 

• The President and Congress
• The Federal Reserve System
• The National Council of Economic Advisors
• The Commerce Department

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.

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

True or False-- the Federal Reserve helps with fiscal policy

• True
• False

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