This quiz works best with JavaScript enabled. Home > Economics > Macroeconomics > Monetary And Fiscal Policy > Monetary And Fiscal Policy – Quiz 23 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Monetary And Fiscal Policy Quiz 23 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. 1/RRR is the equation for: A) Money Multiplier. B) Required Reserve Ratio. C) Monetary Policy. D) None of the Above. Show Answer Correct Answer: A) Money Multiplier. 2. How are fiscal and monetary policies similar? A) They both use the same tools to fix economic problems. B) They both try to promote economic stability. C) They always must have Congressional approval before passing. D) They both are decided by a Board of Governors. Show Answer Correct Answer: B) They both try to promote economic stability. 3. The bad weather affect the farmer's crop. A) Microeconomics. B) Macroeconomics. Show Answer Correct Answer: A) Microeconomics. 4. Sales taxes are an example of A) Progressive Taxes. B) Proportional Taxes. C) Regressive Taxes. D) None of above. Show Answer Correct Answer: C) Regressive Taxes. 5. The Fed wants to encourage people to stop saving money and start spending. What type of policy is this? What action might they take regarding the Required Reserve, Discount Rate and/or bonds? A) Tight Monetary Policy, raise the rates. B) Easy Monetary policy, lower the rates. C) Tight Moentary policy, lower the rates. D) Easy Moentary policy, raise the rates. Show Answer Correct Answer: B) Easy Monetary policy, lower the rates. 6. Programs like defense spending and medicaid that the government chooses to spend our tax dollars on is known as A) Mandatory spending. B) Discretionary spending. C) Monetary policy. D) Fiscal policy. Show Answer Correct Answer: B) Discretionary spending. 7. Expansionary monetary policy will increase both output (real GDP) and price level. A) True. B) False. Show Answer Correct Answer: A) True. 8. Receiving a welfare check A) Expansionary and discretionary. B) Expansionary and automatic. C) Contractionary and discretionary. D) Contractionary and automatic. Show Answer Correct Answer: B) Expansionary and automatic. 9. Unemployment benefits, income tax structures, and social security payments are discretionary fiscal policies A) TRUE. B) FALSE. Show Answer Correct Answer: B) FALSE. 10. The Federal Reserve Chairperson is ..... A) Elected. B) Appointed by Congress. C) Appointed by the President. D) None of above. Show Answer Correct Answer: C) Appointed by the President. 11. Use the passage to answer the following question. Everyone in Bananatown loves bananas! In fact, sometimes they are willing to take them as a form of payment for goods and services instead of dollars. Bill, a tourist, sees an opportunity to make some money due to 8 bananas being worth $ 2. He buys all of the bananas in Bananatown and goes home. He stores them in the trunk of his car for 6 months. Bill then goes back to Bananatown, knowing that the people there will be excited to purchase bananas from him. He opens his trunk and realizes that this plan was not well thought out, as all the bananas are rotten. How are bananas used as a form of money in Bananatown? A) It is impossible to use bananas as currency in Bananatown. B) Bananas function as a medium of exchange and store of value, but not as a unit of account. C) Bananas function as a unit of account and store of value, but not as a medium of exchange. D) Bananas function as a unit of account and medium of exchange, but not as a store of value. Show Answer Correct Answer: D) Bananas function as a unit of account and medium of exchange, but not as a store of value. 12. Which of the following people were proponents of Demand-side economics A) Arthur Laffer. B) JFK. C) Ronald Reagan. D) Herbert Hoover. Show Answer Correct Answer: B) JFK. 13. When income increases, the tax rate increases is an example of ..... A) Excise taxes. B) Sales taxes. C) Regressive taxes. D) Progressive taxes. Show Answer Correct Answer: D) Progressive taxes. 14. When we are in a recession, we need A) Expansionary Fiscal and Monetary Policy. B) Contractionary Fiscal and Monetary Policy. Show Answer Correct Answer: A) Expansionary Fiscal and Monetary Policy. 15. Inflation is occurring. What should the Federal Reserve do? A) Lower the discount rate. B) Raise taxes. C) Sell Bonds. D) Lower government spending. Show Answer Correct Answer: C) Sell Bonds. 16. To increase the nation's money supply, the Fed can: A) Increase the reserve requirement. B) Decrease the discount rate. C) Increase the discount rate. D) Sell government securities in the open market. Show Answer Correct Answer: B) Decrease the discount rate. 17. What is the main reason why Americans have been reluctant to raise taxes? A) To encourage economic growth. B) To reduce government spending. C) To stimulate consumer spending. D) To adhere to supply side economics. Show Answer Correct Answer: A) To encourage economic growth. 18. Who provides an individual with a W-2 form? A) Your employer. B) The federal government. C) The employee. D) The IRS. Show Answer Correct Answer: A) Your employer. 19. Which of the following is NOT a tool of the Federal Reserve A) Setting Discount Rates. B) Increasing or Decreasing Taxes. C) Changing the Reserve Requirements in Banks. D) Buying and selling securities using open market operations. Show Answer Correct Answer: B) Increasing or Decreasing Taxes. 20. How many districts are there in the Federal Reserve System A) 10. B) 12. C) 24. D) 15. Show Answer Correct Answer: B) 12. ← 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