SIE practice questioneasyMonetary vs. Fiscal Policy
Fiscal policy is controlled by which entity?
- AThe Federal Reserve Board
- BThe Federal Open Market Committee (FOMC)
- CThe Securities and Exchange Commission
- DThe U.S. Congress and the President✓ Correct answer
Explanation
Why D — The U.S. Congress and the President
Fiscal policy — government spending and taxation — is controlled by Congress and the President. Monetary policy — managing the money supply and interest rates — is controlled by the Federal Reserve (through the FOMC). This distinction is critical for the SIE exam. The SEC regulates securities markets and has no role in economic policy. The FOMC is part of the Federal Reserve system and handles monetary policy.
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