AnswersMO-EconomicsFiscal Policy: Spending

Fiscal Policy: Spending Answers

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1
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What does deficit spending require a government to do?

l
lay off workers
c
cut taxes
t
take on debt
h
hire more workers
2
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Which statement best describes the likely effects of an expansionary fiscal policy?

I
It can increase interest rates and unemployment, but lower inflation.
I
It can increase interest rates, unemployment and inflation.
I
It can reduce interest rates and inflation, but increase unemployment.
I
It can reduce interest rates and unemployment, but increase inflation.
3

Which of the following statements most accurately describes the federal government and its employees?

M
Millions of Americans work for the federal government.
T
The federal government is not allowed to hire employees.
T
The majority of Americans are employed by the federal government.
T
The number of federal employees is too small to affect government spending.
4

A diagram shows that taxes go into the government, which then go into spending.

Question illustration
G
Government Spending
T
The National Economy
T
The Federal Debt
F
Fiscal Policy
8

Spending that is required by law is known as

d
discretionary spending.
d
deficit spending.
m
mandatory spending.
e
expansionary spending.

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