This quiz works best with JavaScript enabled. Home > Economics > Macroeconomics > Monetary And Fiscal Policy > Monetary And Fiscal Policy – Quiz 11 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Monetary And Fiscal Policy Quiz 11 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. How much must the bank keep on hand if the Required Reserve is 10% and there is a deposit of $ 100. A) 100. B) 110. C) 90. D) 10. Show Answer Correct Answer: D) 10. 2. Inflation is a sustained increase in the general level of ..... A) Accounts. B) Income. C) Prices. D) Profit. Show Answer Correct Answer: C) Prices. 3. What did not cause the national debt to rise under President Reagan: A) Tax Cuts. B) Increased defense spending. C) War Spending. D) Economic Downturn. Show Answer Correct Answer: C) War Spending. 4. If the government is concerned about unemployment, which fiscal policy tool would they use? A) Increase government spending. B) Increase income taxes. C) Increase reserve requirement to decrease the money supply. D) Increase discount rate to decrease the money supply. Show Answer Correct Answer: A) Increase government spending. 5. Makes Monetary Policy. A) Congress. B) President. C) The Federal Open Market Committee. D) Bank CEOs. Show Answer Correct Answer: C) The Federal Open Market Committee. 6. Congress cutting taxes is an example of ..... A) Fiscal Policy. B) Monetary Policy. Show Answer Correct Answer: A) Fiscal Policy. 7. Impact of Fiscal Policy A) Can create jobs, increase wages, cause inflation or deflation, and motivate consumer spending. B) Controls rates on loans for houses, cars, education, etc. Show Answer Correct Answer: A) Can create jobs, increase wages, cause inflation or deflation, and motivate consumer spending. 8. There are 15 Federal Reserve Districts A) True. B) False, there are 20 Districts. C) False, there are 12 districts. D) False, there are 9 districts. Show Answer Correct Answer: C) False, there are 12 districts. 9. Contractionary monetary policy on the part of the Fed results in A) An increase in the money supply, an increase in interest rates, and an increase in GDP. B) A decrease in money supply, a decrease in interest rates, and a decrease in GDP. C) A decrease in the money supply, an increase in interest rates, and a decrease in GDP. D) An increase in the money supply, a decrease in interest rates, and an increase in GDP. Show Answer Correct Answer: C) A decrease in the money supply, an increase in interest rates, and a decrease in GDP. 10. An increase in government spending or a reduction in taxes A) Monetary policy. B) Fiscal policy. C) Expansionary policy. D) Contractionary policy. Show Answer Correct Answer: C) Expansionary policy. 11. What school of economists are strong proponents of the use of monetary policy to induce growth? A) Keynesians. B) Neo-classicals. C) Both neo-classicals and Keynesians. D) Both discourage it. Show Answer Correct Answer: A) Keynesians. 12. Everyone pays the same percent in taxes. A) Proportional tax. B) Progressive tax. C) Regressive tax. D) Sales tax. Show Answer Correct Answer: A) Proportional tax. 13. The institution responsible for managing a nation's money supply is the ..... A) Central Bank. B) Trade Commission. C) National Security. D) Government Regulator. Show Answer Correct Answer: A) Central Bank. 14. Over all increase in prices in a short period of time can be describes as A) A good thing because there is lots of spending. B) A bad thing because it points toward a rise in inflation. C) Neither prices are always rising. D) None of above. Show Answer Correct Answer: B) A bad thing because it points toward a rise in inflation. 15. Number of federal reserve district banks? A) 5. B) 10. C) 12. D) 21. Show Answer Correct Answer: C) 12. 16. What is the term used for the Federal Reserve's activity of buying and selling government debt? A) Quantitative easing. B) Open market operations. C) Monetary policy. D) Fiscal policy. Show Answer Correct Answer: A) Quantitative easing. 17. The government uses fiscal policy to try and achieve ..... A) Full employment. B) Stable prices. C) Economic growth. D) All of these. Show Answer Correct Answer: D) All of these. 18. An example of a contractionary fiscal policy would be if: A) Taxes were cut. B) The government bailed out GM. C) The Fed decrease the fed funds rate. D) Taxes were increased. Show Answer Correct Answer: D) Taxes were increased. 19. What will the FEDs do when GDP is increasing dramatically A) Increase the discount rate. B) Decrease the discount rate. C) Neither. D) None of above. Show Answer Correct Answer: A) Increase the discount rate. 20. What is the main way the Federal Reserve influences the money supply through Open Market Operations? A) Supplying currency. B) Clearing checks. C) Setting interest rates. D) Buying and selling government debt. Show Answer Correct Answer: D) Buying and selling government debt. ← PreviousNext →Related QuizzesMacroeconomics QuizzesEconomics QuizzesMonetary And Fiscal Policy Quiz 1Monetary And Fiscal Policy Quiz 2Monetary And Fiscal Policy Quiz 3Monetary And Fiscal Policy Quiz 4Monetary And Fiscal Policy Quiz 5Monetary And Fiscal Policy Quiz 6Monetary And Fiscal Policy Quiz 7Monetary And Fiscal Policy Quiz 8 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books