This quiz works best with JavaScript enabled. Home > Economics > Macroeconomics > Monetary And Fiscal Policy > Monetary And Fiscal Policy – Quiz 13 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Monetary And Fiscal Policy Quiz 13 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. ..... the reserve requirement will decrease the money supply A) Increase. B) Decrease. Show Answer Correct Answer: A) Increase. 2. A budget deficit..... A) Increases the National Debt. B) Lowers the National Debt. C) Is the same as the national deficit. D) Has no relation to the national Debt. Show Answer Correct Answer: A) Increases the National Debt. 3. If inflation is 5% and GDP is up 4.5%, what should the FED do? A) Buy bonds. B) Raise income taxes. C) Sell securities. D) Lower the reserve requirement. Show Answer Correct Answer: C) Sell securities. 4. Monetary Policies responsibilities include: A) Buying and selling securities. B) Lending Money to Banks. C) Pay interest on bank reserves. D) All of the Above. Show Answer Correct Answer: D) All of the Above. 5. Which of the following is a reduction in the tax in general? A) Tax credit. B) Tax deduction. C) Tax waiver. D) Tax exemption. Show Answer Correct Answer: A) Tax credit. 6. The Central bank of the United States is called A) The Federal Reserve. B) Bank of the United States. C) US Bank. D) Bank of America. Show Answer Correct Answer: A) The Federal Reserve. 7. When interest rates rise, the demand for money (think of loans) A) Increases. B) Decreases. C) Is unaffected. D) None of above. Show Answer Correct Answer: B) Decreases. 8. How are spending and interest rates related? A) Higher interest rates, less investment spending. B) Higher interest rates, more investment spending. C) Lower interest rates, less investment spending. D) None of the Above. Show Answer Correct Answer: A) Higher interest rates, less investment spending. 9. In order to help the economy grow, the FED may ..... the reserve requirement, allowing banks to loan more people money so that they spend more A) Lower. B) Raise. C) Spend more. D) Save more. Show Answer Correct Answer: A) Lower. 10. National Debt A) Influences rates and credit. B) The accumulation of budget deficits. C) A debt that a state owes. D) The World debt combined. Show Answer Correct Answer: B) The accumulation of budget deficits. 11. The best explanation of how a government uses fiscal policy to intervene in an economy is ..... A) Increasing import costs. B) Reducing tariffs. C) Raising the number of items produced. D) Changing levels of taxes and government spending. Show Answer Correct Answer: D) Changing levels of taxes and government spending. 12. Expansionary monetary policy is conducted by increasing the money supply A) True. B) False. Show Answer Correct Answer: A) True. 13. Which of the following is a tool of monetary policy used by central banks? A) Government spending. B) Fiscal stimulus. C) Open market operations. D) Subsidies to industries. Show Answer Correct Answer: C) Open market operations. 14. Fiscal policy during periods of inflation is likely to be ..... A) Expansionary. B) Contractionary. C) Both Expansionary and Contractionary. D) Neither Expansionary note Contractionary. Show Answer Correct Answer: B) Contractionary. 15. This group is in charge of overseeing of the day to day business of the Federal Reserve + setting interest rates A) Federal Open Market Committee (FOMC). B) Federal Government. C) 12 District Banks. D) Member Banks. Show Answer Correct Answer: A) Federal Open Market Committee (FOMC). 16. Decisions about how much to spend and how much to tax are part of ..... A) Monetary Policy. B) Fiscal Policy. Show Answer Correct Answer: B) Fiscal Policy. 17. Which agency within the Executive Branch deals with the federal budget. A) Office of Management and Budget. B) Budget Office. C) Congressional Budget Office. D) Trump's Accountant. Show Answer Correct Answer: A) Office of Management and Budget. 18. Will the following slow down the economy or stimulate the economy:cut federal spending A) Slow down. B) Stimulate. C) No economic change. D) None of above. Show Answer Correct Answer: A) Slow down. 19. The largest category of spending for state and local governments is ..... A) Highways. B) Education. C) Fire and Police. D) Medical Costs. Show Answer Correct Answer: B) Education. 20. Higher discount rate, higher interest rates, higher reserve requirement A) Contractionary Fiscal Policy. B) Expansionary Fiscal Policy. C) Contractionary Monetary Policy. D) Expansionary Monetary Policy. Show Answer Correct Answer: C) Contractionary Monetary Policy. ← 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