This quiz works best with JavaScript enabled. Home > Economics > Macroeconomics > Monetary And Fiscal Policy > Monetary And Fiscal Policy – Quiz 16 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Monetary And Fiscal Policy Quiz 16 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. How do environmental policies impact businesses and consumers? A) Environmental policies have no impact on businesses and consumers. B) Environmental policies can impose regulations and costs for compliance on businesses, while also creating opportunities for innovation and sustainable practices. Consumers may experience changes in prices, availability of products, and environmental impact of their purchases. C) Environmental policies lead to decreased innovation and higher costs for businesses, while consumers experience no changes. D) Environmental policies only benefit businesses and consumers . Show Answer Correct Answer: B) Environmental policies can impose regulations and costs for compliance on businesses, while also creating opportunities for innovation and sustainable practices. Consumers may experience changes in prices, availability of products, and environmental impact of their purchases. 2. The FDIC (Federal Depositor's Insured Corporation) which insures individual bank deposits was established to make sure that A) Banks do not fail. B) Depositors do not lose money if a bank fails. C) Banks charge a fair amount of interest on loans. D) The government has enough gold to cover its expenses. Show Answer Correct Answer: B) Depositors do not lose money if a bank fails. 3. Kendall makes $ 40, 000 per year and has a tax rate of 20%. Kaitlin makes $ 150, 000 per year and has a tax rate of 20%. What type of tax is this? A) Progressive. B) Regressive. C) Proportional. D) Fair. Show Answer Correct Answer: C) Proportional. 4. The idea that money is fungible/substitutable and can be used to value goods and services. A) Store of value. B) Bartering. C) Medium of exchange. D) Unit of account. Show Answer Correct Answer: D) Unit of account. 5. The action by the FED to adjust the size of the money supply, and to adjust interest rates in order to keep prices down and employment high. A) Fiscal policy. B) Monetary policy. Show Answer Correct Answer: B) Monetary policy. 6. The initial impact of an increase in government spending is to shift A) Aggregate demand to the right. B) Aggregate demand to the left. C) Aggregate supply to the right. D) Aggregate supply to the left. Show Answer Correct Answer: A) Aggregate demand to the right. 7. Decreasing Taxes will cause people to work more is a fundamental ideal of: A) Keynesian Economics. B) Classical Economics. C) Supply-Side Economics. D) Laissez-Faire Economics. Show Answer Correct Answer: C) Supply-Side Economics. 8. Whose job is it to control the money supply? A) The Executive Branch of Government. B) Federal Reserve. C) President. D) None of above. Show Answer Correct Answer: B) Federal Reserve. 9. Expansionary Monetary Policy involves increasing the money supply and govt. spending A) True. B) False. Show Answer Correct Answer: B) False. 10. Increasing the RRR will do what to the money supply? A) Increase. B) Decrease. C) No Effect. D) All of the Above. Show Answer Correct Answer: B) Decrease. 11. When making a deposit into a financial institution, such as a bank, this BEST reflects which function of money? A) Store of Value. B) Standard of Value. C) Unit of Account. D) Medium of Exchange. Show Answer Correct Answer: A) Store of Value. 12. A sales tax is a..... A) Proportional tax. B) Progressive tax. C) Regressive tax. D) Sales tax. Show Answer Correct Answer: C) Regressive tax. 13. The sum of all deficits A) National Debt. B) National Deficit. C) Debt Ceiling. D) Fiscal Cliff. Show Answer Correct Answer: A) National Debt. 14. What form of Economics is better known as demand-side economics? A) Classical. B) Supply-Side. C) Keynesian. D) All of the Above. Show Answer Correct Answer: C) Keynesian. 15. Will the following slow down the economy or stimulate the economy:lower taxes A) Slow down. B) Stimulate. C) No economic change. D) None of above. Show Answer Correct Answer: B) Stimulate. 16. What is the purpose of a budget deficit in fiscal policy? A) To indicate a healthy economy with high government revenue. B) To signify that the government is overspending and not managing its finances well. C) To fund essential public services and stimulate economic growth when necessary. D) To demonstrate a surplus in government accounts. Show Answer Correct Answer: C) To fund essential public services and stimulate economic growth when necessary. 17. If a country is experiencing high inflation, what type of monetary policy action is the central bank likely to take? A) Increase interest rates and sell government securities. B) Decrease interest rates and buy government securities. C) Increase government spending and reduce taxes. D) Decrease government spending and increase taxes. Show Answer Correct Answer: A) Increase interest rates and sell government securities. 18. Expansionary Fiscal Policy consist of A) Increase government spending and Decrease taxes to help stimulate the economy. B) Decrease government spending and Increase taxes to help slow down the economy. C) Increase the money supply by purchasing securities and Decrease interest rates help stimulate the economy. D) None of above. Show Answer Correct Answer: A) Increase government spending and Decrease taxes to help stimulate the economy. 19. Which is NOT one of government's role in the economy? A) Protecting property rights. B) Maintaining competition. C) Protecting consumers, savers, and investors. D) Protecting monopolistic corporations. Show Answer Correct Answer: D) Protecting monopolistic corporations. 20. An example of Contractionary Fiscal policy A) Increasing Government Spending. B) Tight Money Policy. C) Cutting Taxes. D) Decreasing Government Spending. Show Answer Correct Answer: D) Decreasing Government Spending. ← 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