C&E: 9.02
Fiscal Policy Practice
NAME:_______________________
DATE:__________
DAY:______
Determine whether the following situations would require expansionary
fiscal policy or contractionary fiscal policy from Congress.
1) The U.S. economy is being sent into a recession.
2) Inflation in the United States is on the rise decreasing the value of the dollar.
3) The U.S. business cycle has just reached a peak and being sent into
contraction.
4) The unemployment rate has just jumped from 4.2% to 4.9%.
5) After coming out of a trough, the U.S. economy is expanding too quickly.
Answer the following questions by selecting the best answer.
6) The unemployment rate for the U.S. is decreasing; however the value of the
dollar is also decreasing. Which would be an appropriate response from
Congress?
A. decrease taxes
C. increase welfare payments
B. decrease government spending
D. increase discount rates
7) The U.S. economy is being sent into a recession. Which of the following
would not be a proper response by Congress?
A. increase welfare
C. increase taxes
B. increase government spending
D. decrease taxes
8) The U.S. economy has been in a recession. Which government body would
be able to implement expansionary fiscal policies?
A. The President
C. The Federal Reserve
B. The Supreme Court
D. The U.S. Congress
9) The U.S. has just come out of an economic peak and analysts predict a long
recessionary period. Which type of policy would be most appropriate from the
U.S. Congress?
A. expansionary fiscal policy
C. tight monetary policy
B. contractionary fiscal policy
D. loose monetary policy
10) During times of inflationary periods, the U.S. Congress does not usually
follow through on the proper fiscal policy actions. Which of the following best
describes why?
A. Contractionary fiscal policy is usually unpopular with voters
B. It is difficult to increase the number of government programs
C. Politicians view inflation as good for the economy
D. Increasing welfare payments is often controversial
C&E: 9.02
Fiscal Policy Practice
NAME:_______________________
DATE:__________
DAY:______
Determine whether the following situations would require expansionary
fiscal policy or contractionary fiscal policy from Congress.
1) The U.S. economy is being sent into a recession.
2) Inflation in the United States is on the rise decreasing the value of the dollar.
3) The U.S. business cycle has just reached a peak and being sent into
contraction.
4) The unemployment rate has just jumped from 4.2% to 4.9%.
5) After coming out of a trough, the U.S. economy is expanding too quickly.
Answer the following questions by selecting the best answer.
6) The unemployment rate for the U.S. is decreasing; however the value of the
dollar is also decreasing. Which would be an appropriate response from
Congress?
A. decrease taxes
C. increase welfare payments
B. decrease government spending
D. increase discount rates
7) The U.S. economy is being sent into a recession. Which of the following
would not be a proper response by Congress?
A. increase welfare
C. increase taxes
B. increase government spending
D. decrease taxes
8) The U.S. economy has been in a recession. Which government body would
be able to implement expansionary fiscal policies?
A. The President
C. The Federal Reserve
B. The Supreme Court
D. The U.S. Congress
9) The U.S. has just come out of an economic peak and analysts predict a long
recessionary period. Which type of policy would be most appropriate from the
U.S. Congress?
A. expansionary fiscal policy
C. tight monetary policy
B. contractionary fiscal policy
D. loose monetary policy
10) During times of inflationary periods, the U.S. Congress does not usually
follow through on the proper fiscal policy actions. Which of the following best
describes why?
A. Contractionary fiscal policy is usually unpopular with voters
B. It is difficult to increase the number of government programs
C. Politicians view inflation as good for the economy
D. Increasing welfare payments is often controversial