This quiz works best with JavaScript enabled. Home > Economics > Macroeconomics > Monetary And Fiscal Policy > Monetary And Fiscal Policy – Quiz 22 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Monetary And Fiscal Policy Quiz 22 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. This seven member group supervises the banking system as part of the Federal Reserve System. A) Federal Advisory Council. B) Board of Governors. C) Federal Open Market Committee. D) Congressional Banking Committee. Show Answer Correct Answer: B) Board of Governors. 2. Which of the following is not one of the reasons that the Federal Reserve System was created? A) There were too many bank panics. B) The economy had too many boom and bust periods. C) It was a way to create more jobs in the economy. D) The banking system was very unstable. Show Answer Correct Answer: C) It was a way to create more jobs in the economy. 3. True/False:The steps that the federal government takes to influence the economy is monetary policy A) True. B) False. Show Answer Correct Answer: B) False. 4. What does VAT stand for? A) Value and Tax. B) Value about Tax. C) Value Added Tax. D) Venture About Tax. Show Answer Correct Answer: C) Value Added Tax. 5. During inflation, Congress should ..... taxes and ..... spending A) Reduce / reduce. B) Reduce / increase. C) Increase / reduce. D) Increase / increase. Show Answer Correct Answer: C) Increase / reduce. 6. The fiscal year for the federal government ends on A) October 1st. B) October 31st. C) September 30th. D) December 31st. Show Answer Correct Answer: C) September 30th. 7. Disadvantages include double taxation and more government regulation A) Sole Propriotorship. B) Partnership. C) Corporation. D) None of above. Show Answer Correct Answer: C) Corporation. 8. Decrease Money Supply A) Fed sells US Savings bonds to banks. B) Fed buys US Savings bonds from banks. Show Answer Correct Answer: A) Fed sells US Savings bonds to banks. 9. "In February, lawmakers set themselves up to reach a more permanent spending agreement by the end of March. Congress agreed to increases to domestic and defense spending over the next two years, raising funding for domestic programs by $ 128 billion and hiking defense budgets by $ 160 billion. But they didn't actually decide where the money would go." A) Fiscal policy. B) Monetary policy. Show Answer Correct Answer: A) Fiscal policy. 10. This the buying and selling of bonds by the FOMC (Federal Reserve) A) Discount Rate. B) Interest on Reserves. C) Required Reserve Ratio. D) Open Market Operations. Show Answer Correct Answer: D) Open Market Operations. 11. Monetary Policy that is financed by selling government bonds is most likely to: A) Reduce business investment by increasing interest rates. B) Reduce business investment by reducing interest rates. C) Increase business investment by increasing interest rates. D) Increase business investment by reducing interest rates. Show Answer Correct Answer: A) Reduce business investment by increasing interest rates. 12. Which are examples of automatic stabilizers A) Taxes. B) Transfer Payments. C) Tax and Transfer Payments. D) Neither taxes or transfer payments. Show Answer Correct Answer: C) Tax and Transfer Payments. 13. Which of the following will result when the Federal Reserve increases the reserve requirement? A) Banks will make more loans and the money supply will increase. B) Banks will make fewer loans and the money supply will increase. C) Banks will make more loans and the money supply will decrease. D) Banks will make fewer loans and the money supply will decrease. Show Answer Correct Answer: D) Banks will make fewer loans and the money supply will decrease. 14. Which item in the federal budget is considered an uncontrollable? A) Defense spending. B) Department of Education spending. C) Interest payments on federal debt. D) Medicaid spending. Show Answer Correct Answer: C) Interest payments on federal debt. 15. The interest rate the FED charges banks to borrow money will be lowered to help the economy grow and raised to slow the economy A) Reserve requirement. B) Discount rate. C) Bank rate. D) Monetary bank. Show Answer Correct Answer: B) Discount rate. 16. The Federal Reserve has how many district banks? A) 20. B) 9. C) 10. D) 12. Show Answer Correct Answer: D) 12. 17. There are ..... Federal Reserve Districts. A) 12. B) 25. C) 18. D) 7. Show Answer Correct Answer: A) 12. 18. What is an appropriate fiscal policy action to fight a recession? A) Increase taxes. B) Increase the money supply. C) Increase government spending. D) Increase the sale of government bonds. Show Answer Correct Answer: C) Increase government spending. 19. A plan to reduce aggregate demand and slow the economy through taxing and spending A) Contractionary Fiscal Policy. B) Expansionary Fiscal Policy. C) Contractionary Monetary Policy. D) Expansionary Monetary Policy. Show Answer Correct Answer: A) Contractionary Fiscal Policy. 20. Contractionary or Tight Monetary 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) Decrease the money supply by selling securities and Increase interest rates help stimulate the economy. D) None of above. Show Answer Correct Answer: C) Decrease the money supply by selling securities and Increase interest rates help stimulate the economy. ← 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