Match the following statements to the proper terms.

1. fiscal policies that favor increasing government spending rather than adjusting taxes

2. fiscal policies that favor cutting taxes rather than increasing government spending

3.A monetary policy designed to increase activity in the economy

4. a monetary policy designed to decrease activity in the economy

5. policies that naturally trigger benefits to increase spending in a recession and reduce spending during inflationary periods

a. supply-side policy
b. tight money policy
c. demand-side policy
d. easy money policy
e. automatic stabilizers

1. d
2. a
3. b
4. c
5. e

To match the statements to the proper terms:

1. Fiscal policies that favor increasing government spending rather than adjusting taxes - This statement aligns with demand-side policy, which focuses on using government spending to stimulate economic activity.

2. Fiscal policies that favor cutting taxes rather than increasing government spending - This statement corresponds to supply-side policy, which aims to promote economic growth and activity by reducing taxes on individuals and businesses.

3. A monetary policy designed to increase activity in the economy - This statement matches with easy money policy, which involves the central bank implementing measures to make borrowing and credit more accessible, thereby encouraging economic growth and activity.

4. A monetary policy designed to decrease activity in the economy - This statement aligns with tight money policy, which involves the central bank implementing measures to constrain borrowing and credit, aiming to reduce inflation and control economic activity.

5. Policies that naturally trigger benefits to increase spending in a recession and reduce spending during inflationary periods - This statement corresponds to automatic stabilizers, which are built-in features of fiscal policy that automatically adjust government spending or taxes based on the state of the economy, helping to stabilize fluctuations and maintain overall economic stability.

So, the correct matches would be:

1. d - easy money policy
2. a - supply-side policy
3. b - tight money policy
4. c - demand-side policy
5. e - automatic stabilizers