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Fiscal Policy: Spending Answers

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Gino is writing a paper about the effects of fiscal policies on the economy. Gino is describing a fiscal policy that aims to improve inflation.How does the policy that Gino is describing most likely affect interest rates and unemployment?

A
The policy would most likely increase interest rates and unemployment.
B
The policy would most likely decrease interest rates and unemployment.
C
The policy would most likely increase unemployment but decrease interest rates.
D
The policy would most likely increase interest rates but decrease unemployment.
2
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What is the main goal in creating the federal budget?

A
managing businesses and increasing spending on all programs
B
deciding how to manage the government’s tax revenue and expenditures
C
finding a way to allow the economy to run on its own
D
finding a way to slow down rapid economic growth
3

Which of these effects of expansionary spending would a government most want to avoid?

h
higher employment
h
higher inflation
g
growth in production
g
growth in consumer spending

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