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Chapter 12: Problem 12

Fiscal policy is made by (LO1) a) the president only b) Congress only c) both the president and Congress d) neither the president nor Congress

Short Answer

Expert verified
c) both the president and Congress

Step by step solution

01

Understand the roles of the president and Congress in the US political system.

The president is the head of the executive branch of the government and is responsible for implementing and enforcing laws. Congress, on the other hand, is a part of the legislative branch and is responsible for making laws, including those related to fiscal policy, such as taxation, government spending, and budgeting.
02

Identify who is responsible for making fiscal policy.

Since fiscal policy involves making laws related to taxes, government spending, and budgeting, it falls under the purview of the legislative branch, which is Congress. However, the president plays a role in proposing and implementing these policies through budget proposals and signing or vetoing legislation.
03

Choose the correct answer based on the roles of the president and Congress.

Based on the roles and responsibilities of the president and Congress in the United States political system, the correct answer to this exercise is c) both the president and Congress, because both branches cooperate to create and implement fiscal policy.

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Most popular questions from this chapter

The most valid argument against the size of the national debt is that it (LO9) a) will ruin the nation when we have to pay it back b) is owed mainly to foreigners c) leaves future generations less plant, equipment, and housing than would be left had there been a smaller debt d) will bankrupt the nation because there is a limit as to how much we can borrow

The \(\$ 787\) billion stimulus package (LO8) a) had little effect on ending the Great Recession b) ended the Great Recession almost immediately c) was basically a Keynesian strategy to end the recession d) had little effect on the federal budget deficit

If equilibrium GDP is \(\$ 5.5\) trillion and full employment GDP is \(\$ 5\) trillion, there is (LO1) a) definitely an inflationary gap b) probably an inflationary gap c) definitely a recessionary gap d) probably a recessionary gap

The automatic stabilizers (LO3) a) help smooth out the business cycle b) make the business cycle worse c) eliminate the business cycle

Between 1998 and 2000 the federal budget surplus and the publicly held national debt \((L \mathrm{~L}, 9)\) a) rose, rose c) rose, fell b) fell, fell d) fell, rose
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