Define the following: a. Fiscal Policy b. Discretionary Spending c. Progressive Taxation d. Debt 2. TRUE AND FALSE (write True or False against each answer. Do not use T or F) a. Discretionary spending is spending on mandated items b. Non-discretionary spending needs legislation to spend the allocated money c. USA follows proportional taxation only d. The governments follow contractionary fiscal policy when GDP levels fall e. The government will follow expansionary fiscal policy during the COVID crisis. f. Balanced budgets refer to the fact that expenditures exceed revenues g. To control inflation, Governments should spend less and tax less h. The tools to conduct fiscal policy are taxes, spending on public goods and services and issuing currency. i. As part of expansionary fiscal policy, the government should lower interest rates j. Contractionary fiscal policy is normally followed during inflationary times 3. MULTIPLE CHOICE (circle the correct answer) a. Discretionary fiscal policy spending refers to: i. Mandatory spending by Government as is legislated by Congress ii. Ability to change taxes so as to adjust revenues to match spending iii. Spending by consumers since it is their decision to spend their incomes iv. Government's ability to choose to spend as it wishes on whatever it can b. Which of the following is considered a fiscal stimulus during COVID crisis: i. Increase taxes on all people ii. Decrease taxes for all people iii. Increase government spending on infrastructure, giving more unemployment benefits, and spending on equipment for health workers. iv. Answers in i&ii v. Answers in ii&iii c. Government debt is: i. When total spending is greater than total revenues ii. When total revenues are greater than total spending iii. Total spending on all goods and services in the military and welfare iv. The sum of all past deficits d. We are in Covid crisis. Almost 26 million people are expected to be unemployed. The best thing the Government can do to stimulate the economy is: i. To borrow and spend more money in helping people ii. To lower social security taxes, and property taxes iii. All of the above iv. None of the above e. Fiscal Policy has to do with: i. The Federal Reserve lowering interest rates so that people can borrow. ii. The government increasing or decreasing taxes iii. The government issuing bonds, treasury bills and treasury notes iv. The Federal Reserve increasing spending on roads, bridges etc. v. Answers in i&ii vi. Answers in ii&iii 4. Mention two key differences between fiscal and monetary policy a. b. 5. Fill in the blanks with an appropriate answer: a. Deficit is........ b. Fiscal stimulus is given by the Government when........ c. Discretionary spending deals with spending on............ d. Administrative lag is the time it takes for government to...... e. Progressive taxation is based on the principle of