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Fiscal and monetary policy practice

This classroom material allows 12th-grade students to practice understanding fiscal and monetary policies through multiple-choice and sequencing questions. Students analyze causes and effects related to taxes, spending, interest rates, and the Federal Reserve's tools.

By Edform · Economics and personal finance · Grade 12 · Published Oct 15, 2026 · New

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Questions

  1. Which of the following is an example of expansionary fiscal policy?
  2. Which of the following actions are tools of monetary policy used by the Federal Reserve?
  3. Place the steps in the correct order to show how the Federal Reserve increases the money supply.
  4. Fill in the blank with the correct term: The main goal of contractionary monetary policy is to reduce ___.
  5. Choose the correct answer from the dropdown: When the government lowers taxes, it is using (fiscal | monetary | trade) policy to try to (stimulate | slow | stabilize) the economy.
  6. Sort each action as either Fiscal Policy or Monetary Policy.
  7. Mark each statement as True or False.
  8. What is the likely effect of the Federal Reserve raising the federal funds rate?
  9. Match each policy tool to its description.
  10. If the government increases spending by $100 billion and the marginal propensity to consume (MPC) is 0.8, what is the total increase in GDP, assuming no crowding out? (Multiplier = 1/(1-MPC))

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