This quiz works best with JavaScript enabled. Home > Economics > Macroeconomics > Monetary And Fiscal Policy > Monetary And Fiscal Policy – Quiz 19 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Monetary And Fiscal Policy Quiz 19 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. What is the primary reason why Social Security and Medicare spending is unlikely to go down? A) Aging population. B) Decrease in demand. C) Political support. D) Budget constraints. Show Answer Correct Answer: A) Aging population. 2. What is fiscal policy and how does it impact the economy? A) Fiscal policy is the government's use of taxation and spending to influence the economy. B) Fiscal policy is the government's use of foreign aid to influence the economy. C) Fiscal policy is the government's use of exchange rates to influence the economy. D) Fiscal policy is the government's use of interest rates to influence the economy. . Show Answer Correct Answer: A) Fiscal policy is the government's use of taxation and spending to influence the economy. 3. Which type of unemployment is due to changes in the business cycle? A) Frictional. B) Seasonal. C) Structural. D) Cyclical. Show Answer Correct Answer: D) Cyclical. 4. Under the Fed's "dual mandate, " they focus on both A) Full employment and stable prices. B) Full employment and maximum GDP growth. C) Maximum GDP growth and stable prices. D) None of above. Show Answer Correct Answer: A) Full employment and stable prices. 5. The Federal Reserve System is commonly called ..... A) The "tax collector". B) The "Fed". C) The "big bank". D) The "big apple". Show Answer Correct Answer: B) The "Fed". 6. In the market for real output, the initial effect of an increase in the money supply is to A) Shift the aggregate supply curve to the right. B) Shift the aggregate supply curve to the right. C) Shift the aggregate demand curve to the left. D) Shift the aggregate demand curve to the right. Show Answer Correct Answer: D) Shift the aggregate demand curve to the right. 7. When revenues exceed expenditures ..... A) There is a budget surplus. B) There is a budget deficit. C) The government must create more money. D) The government is forced to issue bonds. Show Answer Correct Answer: A) There is a budget surplus. 8. The occurrence of high inflation and unemployment at the same time A) Stagflation. B) Stop and go, on and off monetary policy. C) Expansionary monetary policy. D) Fiscal policy. Show Answer Correct Answer: A) Stagflation. 9. Assume that the central bank buys securities from member banks using open market operations, which of the following will decrease in the short run? A) Taxes. B) Investment. C) Discount rate. D) Interest rate. Show Answer Correct Answer: D) Interest rate. 10. Coins and currency A) Fractional Reserve Banking. B) Legal Reserves. C) Fiscal. D) Reserve system. Show Answer Correct Answer: B) Legal Reserves. 11. The Consumer Price Index (CPI) measures ..... A) Inflation. B) GDP. C) Unemployment. D) None of above. Show Answer Correct Answer: A) Inflation. 12. True or False:Tax fraud can result in prison time and monetary penalties. A) True. B) False. Show Answer Correct Answer: A) True. 13. If the Federal Reserve raises reserve requirements A) Money Supply Increases. B) Money supply decreases. Show Answer Correct Answer: B) Money supply decreases. 14. Another name for interest rate A) Federal reserve rate. B) Discount rate. C) Nasdaq. D) None of these. Show Answer Correct Answer: B) Discount rate. 15. Which of the following actions by the Fed would promote a tight money policy? A) Increasing the reserve requirement. B) Buying government securities. C) Announcing that it anticipates adopting an easy money policy. D) Decreasing the reserve requirement. Show Answer Correct Answer: A) Increasing the reserve requirement. 16. If the economy is in a recession, the Fed could do all of the following except A) Lower taxes. B) Lower the Discount rate. C) Lower the Federal Funds rate. D) Buy Securities. Show Answer Correct Answer: A) Lower taxes. 17. What is meant by the statement "money is a medium of exchange" ? A) Money is a measure of societal status. B) Money is a measure of a product's value. C) Money can be traded for goods and services. D) Money can be accumulated as a form of wealth. Show Answer Correct Answer: C) Money can be traded for goods and services. 18. If you want to slow down the economy, the Central Bank can ..... the money supply by ..... interest rates. A) Increase, decreasing. B) Decrease, increasing. C) Maintain, maintain. D) Increase, increase. Show Answer Correct Answer: B) Decrease, increasing. 19. What are the tools used by the government to implement fiscal policy? A) Taxation, government spending, and borrowing. B) Privatization of government assets. C) Raising interest rates. D) Printing new currency . Show Answer Correct Answer: A) Taxation, government spending, and borrowing. 20. Is a joint effort between the executive and legislative branches A) Fiscal policy. B) Monetary policy. Show Answer Correct Answer: A) Fiscal 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