This quiz works best with JavaScript enabled. Home > Economics > Macroeconomics > Monetary And Fiscal Policy > Monetary And Fiscal Policy – Quiz 14 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Monetary And Fiscal Policy Quiz 14 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Expansionary monetary policy is when there is too little money, the FED wants to discourage banks from borrow so they decrease the discount rate. A) TRUE. B) FALSE. Show Answer Correct Answer: B) FALSE. 2. GDP is a measure of all the goods and services bought and sold in a 3 month period but it doesn't include A) The sale of second hand goods. B) The sale of new cars. C) Products purchased by minors only adults. D) Includes all of the above. Show Answer Correct Answer: A) The sale of second hand goods. 3. Security A) Financial assets that can be bought or sold, such as stocks and bonds. B) Financial assets that are given out as charity. C) The total amount of money a bank holds. D) A tax on bonds and stocks. Show Answer Correct Answer: A) Financial assets that can be bought or sold, such as stocks and bonds. 4. When would the FED use an expansionary policy A) When they want to stimulate spending in the economy. B) When they want to reduce spending in the economy. C) When they want to regulate make transactions. D) None of above. Show Answer Correct Answer: A) When they want to stimulate spending in the economy. 5. Who controls the monetary policy in the US? A) The Federal Reserve. B) The Government. Show Answer Correct Answer: A) The Federal Reserve. 6. When the Federal Reserve buys government securities (bonds) in the open market, how will it affect the following economic indicators? A) Unemployment:decrease Gross Domestic Product:decrease. B) Unemployment:decrease Gross Domestic Product:increase. C) Unemployment:increase Gross Domestic Product:increase. D) Unemployment:increase Gross Domestic Product:decrease. Show Answer Correct Answer: B) Unemployment:decrease Gross Domestic Product:increase. 7. A general rise in prices and goods and services over a period of time (a) A) A Inflation. B) Deflation. C) Unemployment. D) Interest rates. Show Answer Correct Answer: A) A Inflation. 8. Changes the Fed makes in the money supply A) Monetary policy. B) Fiscal policy. C) Expansionary policy. D) Contractionary policy. Show Answer Correct Answer: A) Monetary policy. 9. A tax that is paid to a third party, and built into the cost of the goods or services is known as a(n) A) Progressive Tax. B) Indirect Tax. C) Regressive Tax. D) Income Tax. Show Answer Correct Answer: B) Indirect Tax. 10. Roman coins are an example of which characteristic of money? A) Durability. B) Uniformity. C) Acceptability. D) Divisibility. Show Answer Correct Answer: A) Durability. 11. The federal government is attempting to encourage spending by consume rs and businesses, a fiscal policy that would BEST serve this purpose would be A) Decreasing taxes. B) Decreasing government spending. C) Reducing the investment tax credit. D) Balancing the budget. Show Answer Correct Answer: A) Decreasing taxes. 12. How are Fiscal policy and the Federal Reserve similiar A) They both use the same tools to fix economic problems. B) They both try to promote economic stability. C) The always must have congressional approval before passing. D) They both have a Board of Governors. Show Answer Correct Answer: B) They both try to promote economic stability. 13. FICA includes taxes to pay for ..... A) Social Security and Medicare. B) Social Security and Unemployment. C) Unemployment and Medicare. D) Medicare and Workers Compensation. Show Answer Correct Answer: A) Social Security and Medicare. 14. Which policies counteract (go against) each other A) Increasing taxes and selling bonds. B) Increasing government spending and selling bonds. C) Decreasing taxes and decreasing reserve requirement. D) Decreasing government spending and increasing the reserve requirement. Show Answer Correct Answer: B) Increasing government spending and selling bonds. 15. Randy makes $ 40, 000 and pays 50% in taxes. Greg makes $ 20, 000 and pays 20% in taxes. Lindsey makes $ 10, 000 and pays 5% in taxes. This is an example of ..... A) Proportional tax. B) Progressive tax. C) Regressive tax. D) Sales tax. Show Answer Correct Answer: B) Progressive tax. 16. The largest source of federal government revenue (what they bring in) is ..... A) Excise taxes. B) Corporate income taxes. C) Personal income taxes. D) FICA. Show Answer Correct Answer: C) Personal income taxes. 17. All of the following will decrease the money supply EXCEPT? A) Increasing the Discount Rate. B) Decreasing the Reserve Requirement. C) Increasing the Reserve Requirement. D) Selling Bonds. Show Answer Correct Answer: B) Decreasing the Reserve Requirement. 18. What monetary policy tools are available to the Federal Reserve A) Changing the RRR. B) Changing the Discount Rate. C) Federal Open Market Operations. D) All of the Above. Show Answer Correct Answer: D) All of the Above. 19. To much money in our economy leads to A) Inflation. B) Recession. Show Answer Correct Answer: A) Inflation. 20. If the Fed lowers the discount rate, what will be the economic effect? A) Expands the money supply. B) Decrease the money supply. Show Answer Correct Answer: A) Expands the money supply. ← 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