Fiscal Policy versus Monetary Policy
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Objective
I can differentiate between fiscal and monetary policy and their potential impacts on the economy.
Part 1 of 4
Warm-up video
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We don't generate video — this one is by CrashCourse on YouTube. The practice questions and exit ticket below were drafted by AI for this objective, and every question is editable in the teacher guide.
Part 2 of 4
Key concepts
3 concepts
- 1
Monetary policy refers to how the government regulates the amount of money in circulation, and the primary task for this is given to the Federal Reserve System.
- 2
Fiscal policy refers to the government’s ability to raise taxes and spend the money it raises.
- 3
Because Americans are generally reluctant to raise taxes and the government has a limited ability to cut spending, monetary policy becomes its major lever in broad-based macroeconomic policy.
Part 3 of 4
Practice
8 questions
What is the primary task of the Federal Reserve System?
The Federal Reserve has two primary tasks. One is to control inflation. What is the other?
Part 4 of 4
Exit ticket
Quick comprehension check
“Explain the key difference between fiscal and monetary policy. Give one example of how each policy could be used to address a recession.”
Sample answer included in the free materials
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