A law cuts income tax rates and increases highway construction spending to raise total demand in a recession. Who decides on that fiscal policy?

Inflation is running high, and the federal funds target range is raised to make borrowing more expensive. Which institution sets that target range?

An annual appropriations bill sets higher funding for federal agencies and is sent for signature. Which actors complete that spending decision?

The Fed buys Treasury securities in the open market to add reserves to the banking system. Which institution directs that monetary-policy action?

The President proposes a new refundable tax credit in the budget. Which body has the constitutional taxing power needed to create it?

Use the line graph of unemployment. Which monetary-policy tool best responds to this economic pattern?

Use the line graph of inflation. Which monetary-policy tool best fits the response to the trend shown?

Use the line graph of unemployment. Which fiscal-policy tool would directly try to raise total demand?

Use the line graph of inflation. Which fiscal-policy response is designed to cool demand?

Use the line graph of short-term interest rates. Which Federal Reserve tool most directly produces this policy-rate path?

Consumer prices are rising quickly, and the FOMC raises its target range for the federal funds rate. What is this policy stance called?

During a recession, Congress cuts payroll taxes and sends rebate payments to households to boost spending. What is this policy stance?

The federal government raises taxes and reduces discretionary spending because demand is pushing prices up. What is this policy stance?

The Fed lowers its discount rate and makes bank borrowing cheaper during a credit crunch. What is this policy stance?

Federal lawyers sue to block a merger that would leave one firm controlling most sales in a national market. Which government role in a market economy is this?

A federal patent lets an inventor stop others from making or selling the invention without permission. Which market-economy role does this show?

EPA rules require power plants to limit smoke that harms people downwind. Which market-economy role is the government performing?

The government pays for national defense, which protects people even if no single resident buys it separately. Which role is this?

A bank borrows overnight directly from its regional Federal Reserve Bank. Which Fed tool is the rate charged on that loan?

To keep the federal funds rate in its target range, the Fed changes the rate paid on balances banks hold at Federal Reserve Banks. Which tool is this?