How the Government Stabilizes the Economy

How does the Government Stabilize the Economy?
Monetary Policy-

Fiscal Policy-

Contractionary Fiscal Policy

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Expansionary Fiscal Policy

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National Debt and National Deficit
Debt- National Debt-

Deficit- National Deficit-

Surplus- National Surplus-

MONETARY & FISCAL POLICY PRACTICE
DIRECTIONS: Read each statement to determine if Monetary or Fiscal Policy should be used. Then determine the actions of the Government or the Federal Reserve.
1.) The rate of inflation has increased over 7% over the last year. The U.S. Government wonders what it can do to help improve this situation.
A. Should we use Fiscal or Monetary Policy?
B. Should we use Contractionary or Expansionary Policies?
C. List the Expansionary or Contractionary Policies we should use.

2.) The Consumer Price Index has gone up by 4% over the last year. The Federal Reserve wonders what it can do to help improve this situation.
A. Should we use Fiscal or Monetary Policy?
B. Should we use Contractionary or Expansionary Policies?
C. List the Expansionary or Contractionary Policies we should use.

3.) The Economy has slowed over the last 3 months. Jerome Powell discusses with his advisors to discuss what changes to policy should be made.
A. Should the Fed use Fiscal or Monetary Policy?
B. Should the Fed use Contractionary or Expansionary Policies?
C. List the Expansionary or Contractionary Policies the Fed should use.

4.) The GDP which measures all goods and services produced in a county in a year has declined over the last 3 months. President Trump discusses with his advisors which policy changes he could make to help the situation.
A. Should we use Fiscal or Monetary Policy?
B. Should we use Contractionary or Expansionary Policies?
C. List the Expansionary or Contractionary Policies we should use.

5.) The economy has decreased for 6 months. The President is now fearful that the economy is in more trouble than his advisors first suggested. The Cabinet meets again to review what actions should be taken to help get the U.S. out of this economic situation.
A. What is this economic situation called?
B. Should we use Fiscal or Monetary Policy?
C. Should we use Contractionary or Expansionary Policies?
D. List the Expansionary or Contractionary Policies we should use.

6.) During the monthly meeting the Federal Reserve Board discusses the statistic that the GDP has decreased for 6 consecutive months. They contact you and ask what actions you think they should take.
A. Should you use Fiscal or Monetary Policy?
B. Should you use Contractionary or Expansionary Policies?
C. List the Expansionary or Contractionary Policies you will use.

7.) Due to the recession, unemployment reaches 7% in the U.S. President Trump feels that this is not acceptable. What actions should he and his advisors do to attempt to reduce this level of unemployment?
A. What type of Unemployment is this?
B Should the Government use Fiscal or Monetary Policy?
C. Should the Government use Contractionary or Expansionary Policies?
D. List the Expansionary or Contractionary Policies the government should use.

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