Place a check next to all of the items that are examples of fiscal policy. There
ID: 1100574 • Letter: P
Question
Place a check next to all of the items that are examples of fiscal policy. There is an increase in income tax rates. The Federal Reserve purchases bonds on the open market. The estate tax is repealed. Government increases military spending. Public money is used to build a high-speed train that connects Los Angeles and Las Vegas. The Federal Reserve increases the money supply by decreasing the reserve-ratio requirement. To help domestic firms, government sets a quota on the number of goods that can be imported.Explanation / Answer
Fiscal Policy is the use of government revenue and expenditure (spending) to influence the economy. It focusses on the Aggregate Demand side of economic activity.
Hence examples of fiscal policy are:
1. There is an increase in income taxes.
2. The estate tax is repealed
3. Government increases military spending
4. Public money is used to build a high-speed train that connects Los Angeles and Las Vegas