• Identify whether the policy action is fiscal or monetary.
• Identify whether the policy action is expansionary or contractionary.
• Draw and label the change that would occur on the ADAS graph as a result of the policy action described in each.
• Identify what will happen as a result of the policy to the price level, employment, and real GDP.

Read the following excerpts. Identify whether the policy action is fiscal or monetary and expansionary or contractionary. Draw and label the change that would occur on the ADAS graph as a result of the policy action described in each. Identify what will happen as a result of the policy to the price level, employment, and real GDP. 1. Excerpt from Public Law 627 of the 84th Congress: Signed into law by President Eisenhower June 29, 1956 "SEC. 102. FEDERAL-AID HIGHWAYS. (a) (1) AUTHORIZATION OF APPROPRIATIONS.For the purpose of carrying out the provisions of the Federal-Aid Road Act approved July 11, 1916 (39 Stat. 355), and all Acts amendatory thereof and supplementary thereto, there is hereby authorized to be appropriated for the fiscal year ending June 30, 1957, $125,000,000 in addition to any sums heretofore authorized for such fiscal year; the sum of $850,000,000 for the fiscal year ending June 30, 1958; and the sum of $875,000,000 for the fiscal year ending June 30, 1959. The sums herein authorized for each fiscal year shall be available for expenditure as follows: (A) 45 per centum for projects on the Federal-aid primary highway system. (B) 30 per centum for projects on the Federal-aid secondary highway system. (C) 25 per centum for projects on extensions of these systems within urban areas." 2. Excerpt from FOMC Statement Released October 24, 2012 "To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the Committee will continue purchasing additional agency mortgage-backed securities at a pace of $40 billion per month. The Committee also will continue through the end of the year its program to extend the average maturity of its holdings of Treasury securities, and it is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities. These actions, which together will increase the Committee's holdings of longer-term securities by about $85 billion each month through the end of the year, should put downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative."

"In particular, the Committee also decided today to keep the target range for the federal funds rate at 0 to 1/4 percent." 3. Excerpt from Public Law 97-34 of the 97th Congress: Signed into law by President Reagan August 13, 1981 "To amend the Internal Revenue Code of 1954 to encourage economic growth through [H.R. 4242] reduction of the tax rates for individual taxpayers, acceleration of capital cost recovery of investment in plant, equipment, and real property, and incentives for savings, and for other purposes." "Sec. 101. Rate cuts; rate reduction credit. Sec. 102. 20-percent maximum rate on net capital gain for portion of 1981. Sec. 103. Deduction for two-earner married couples. Sec. 104. Adjustment to prevent inflation-caused tax increase."

4. Excerpt from Public Law 101-508 of the 101st Congress: Signed into law by President George H.W. Bush November 5, 1990 "SEC. 11101. ELIMINATION OF PROVISION REDUCING MARGINAL TAX RATE FOR HIGH-INCOME TAXPAYERS. "If taxable income is: The tax is: Not over $32,450 15% of taxable income. Over $32,450 but not over $78,400 $4,867.50, plus 28% of the ^ excess over $32,450. Over $78,400 $17,733.50, plus 31% of the excess over $78,400." 5. Excerpt from FOMC Statement Released July 27, 2022 "The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. In support of these goals, the Committee decided to raise the target range for the federal funds rate to 2-1/4 to 2-1/2 percent and anticipates that ongoing increases in the target range will be appropriate. In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in the Plans for Reducing the Size of the Federal Reserve's Balance Sheet that were issued in May."