Explain the difference between fiscal policy and monetary policy. How does each tool work? Who is responsible for them?
What will be an ideal response?
Fiscal policy is a tool to achieve economic goals through the budget process. The president and Congress are responsible for these actions. Monetary policy attempts to achieve these goals through changes in the money supply, and the Fed is responsible for this policy. Students should discuss the tools of taxing and spending changes and monetary policy tools (e.g., change in interest rates) and how these may affect the economy. Interrelationships occur because the policies can conflict with each other or cause an “overshooting of the goal.”
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Which of the following is a cause of the latest round of globalization?
a. decrease in tariff barriers as a result of GATT and WTO b. increase in tariff barriers as a result of GATT and WTO c. British imperial expansion in the nineteenth century d. creation of trade blocs e. wage equality between the Global South and industrialized countries