Question

How does the federal government's fiscal policy affect the U.S. economy?(1 point)
Responses

Members of the federal government consult with banks to change interest rates and availability of lending.
Members of the federal government consult with banks to change interest rates and availability of lending.

The federal government implements tax and spending measures that affect employment, economic growth, and inflation.
The federal government implements tax and spending measures that affect employment, economic growth, and inflation.

The President issues executive orders to influence changes to consumer and business spending.
The President issues executive orders to influence changes to consumer and business spending.

The House and Senate pass new laws and regulations that can make changes to wealth distribution.

Answer 1

Why is contractionary fiscal policy often not used by the federal government?(1 point)
Responses

Decreases in federal government revenue and increasing expenses cause large deficits and adds to the national debt, which put a strain on the economy.
Decreases in federal government revenue and increasing expenses cause large deficits and adds to the national debt, which put a strain on the economy.

Individual and corporate tax rates increase while spending for social programs decreases, both of which would lead the economy to slow down or contract.
Individual and corporate tax rates increase while spending for social programs decreases, both of which would lead the economy to slow down or contract.

The increased individual and corporate income taxes overheats the economy and increases inflation.
The increased individual and corporate income taxes overheats the economy and increases inflation.

The increase in individual and corporate tax rates as well as government spending cause a slow down in the private sector economy

Answer 2

What impact does an expansionary fiscal policy action, such as a tax cut, generally have on consumer and business spending?(1 point)
Responses

spending decreases for both businesses and consumers
spending decreases for both businesses and consumers

spending increases for businesses and decreases for consumers
spending increases for businesses and decreases for consumers

spending increases for both businesses and consumers
spending increases for both businesses and consumers

spending decreases for businesses and increases for consumers

Answer 3

What is considered healthy economic growth for fiscal policy in terms of percent of Gross Domestic Product (GDP) per year?(1 point)
Responses

0% to 1%
0% to 1%

4% to 5%
4% to 5%

2% to 3%
2% to 3%

3% to 4%

Answer 4

The federal government implements tax and spending measures that affect employment, economic growth, and inflation.

Answer 5

Individual and corporate tax rates increase while spending for social programs decreases, both of which would lead the economy to slow down or contract.

Answer 6

Spending increases for both businesses and consumers.

Answer 7

2% to 3%