Fiscal Policy Fundamentals
An 11th-grade social studies worksheet covering the basics of fiscal policy, including its tools, objectives, and impact on the economy.
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Fiscal Policy Fundamentals
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Read each question carefully and provide your answer in the space provided. For multiple-choice questions, circle the letter corresponding to the correct answer.
1. Which of the following is considered a tool of fiscal policy?
Interest rates
Government spending
Money supply
Exchange rates
2. An expansionary fiscal policy aims to:
Decrease aggregate demand
Increase unemployment
Stimulate economic growth
Reduce inflation
1. Fiscal policy is primarily conducted by central banks.
True
False
2. Increasing taxes is an example of a contractionary fiscal policy.
True
False
1. The two main tools of fiscal policy are government spending and .
2. When the government spends more than it collects in taxes, it creates a budget .
1. Briefly explain the difference between expansionary and contractionary fiscal policy.
Use the words below to complete the sentences.
1. Fiscal policy is used to the economy by influencing .
2. During a , an expansionary fiscal policy might be used to boost the economy and reduce unemployment, while during periods of high , a contractionary policy might be used.