This quiz works best with JavaScript enabled. Home > Economics > Macroeconomics > Monetary And Fiscal Policy > Monetary And Fiscal Policy – Quiz 25 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Monetary And Fiscal Policy Quiz 25 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. If the economy is in an inflationary period, what action would Fiscal Policy most likely take? A) Decrease taxes. B) Decrease the discount rate. C) Increase taxes. D) Increase Spending. Show Answer Correct Answer: C) Increase taxes. 2. FOMC is made up of ..... and ..... A) Chairman Reserve presidents. B) Chairman President of the US. C) New York's President Chairman. D) Board of Governors Five Presidents of the Federal Reserve Banks. Show Answer Correct Answer: D) Board of Governors Five Presidents of the Federal Reserve Banks. 3. Fiscal policy tools deal with what? A) How government regulates the amount of money in circulation. B) A general, sustained upward movement of prices for goods and services in an economy. C) The gathering of tax revenues and using the money that's raised. D) None of above. Show Answer Correct Answer: C) The gathering of tax revenues and using the money that's raised. 4. How does the Federal Reserve influence the amount of money in circulation through interest rates? A) By charging high interest rates to encourage borrowing. B) By charging low interest rates to discourage borrowing. C) By setting interest rates for banks to lend money. D) By buying and selling government debt. Show Answer Correct Answer: C) By setting interest rates for banks to lend money. 5. If Congress raises taxes, the FED should A) Buy bonds. B) Sell bonds. C) Decrease the discount rate. D) Decrease spending. Show Answer Correct Answer: B) Sell bonds. 6. The amount of money banks are supposed to hold back to pays its customers. A) Open Market Operations. B) Federal Funds Rate. C) Discount Rate. D) Required Reserve Ratio. Show Answer Correct Answer: D) Required Reserve Ratio. 7. Being able to attribute a definite price on an item: A) Store of Value. B) Unit of Account. C) Medium of Exchange. D) Specialization. Show Answer Correct Answer: B) Unit of Account. 8. Part of the spending on the Caldecott Tunnel project in northern California came from the American Reinvestment and Recovery Act, which is an example of ..... aimed at increasing real GDP and employment. A) An automatic stabilizer. B) A transfer payment. C) Contractionary fiscal policy. D) Discretionary fiscal policy. Show Answer Correct Answer: D) Discretionary fiscal policy. 9. ..... for ice cream will ..... when the weather is cold. A) Demand, decrease. B) Monopoly, demand. C) Demand, increase. D) Demand, supply. Show Answer Correct Answer: A) Demand, decrease. 10. What is the interest rate called that the Federal Reserve sets? A) Discount rate. B) Federal funds rate. C) Prime rate. D) Libor rate. Show Answer Correct Answer: A) Discount rate. 11. The top of the organizational chart of the Federal Reserve System is the ..... A) Mayor of Washington D.C. B) President of the US. C) Head of the largest bank in the country. D) Chairperson. Show Answer Correct Answer: D) Chairperson. 12. Which is an example of representative money? A) Diamonds. B) Checks. C) A $ 50 bill. D) A fur coat. Show Answer Correct Answer: B) Checks. 13. The New York Federal Reserve building holds what percentage of the world's gold supply? A) 25%. B) 75%. C) 20%. D) 30%. Show Answer Correct Answer: A) 25%. 14. Price Stability A) Assets that are bought or sold. B) High enough price period to control inflation. C) Assets you can invest in. D) A low and stable rate of inflation maintained over an extended period of time. Show Answer Correct Answer: D) A low and stable rate of inflation maintained over an extended period of time. 15. Which of the following statements regarding taxes is correct? A) Most economists believe that, in the short run, the greatest impact of a change in taxes is on aggregate supply, not aggregate demand. B) An increase in taxes shifts the aggregate demand curve to the right. C) A decrease in taxes shifts the aggregate supply curve to the left. D) A permanent change in taxes has a greater effect on aggregate demand than a temporary change in taxes. Show Answer Correct Answer: D) A permanent change in taxes has a greater effect on aggregate demand than a temporary change in taxes. 16. If the discount rate were to be increased what would happen to the money supply A) Increase. B) Decrease. C) Stay the Same. D) None of the Above. Show Answer Correct Answer: B) Decrease. 17. Expansionary Fiscal Policy examples are: A) Cutting Taxes and Decreasing Government Spending. B) Raising Taxes and decreasing government spending. C) Raising Taxes and increasing government spending. D) Cutting taxes and increasing government spending. Show Answer Correct Answer: D) Cutting taxes and increasing government spending. 18. A 1040 form is used to: A) File taxes. B) Calculate your income. C) Apply for loans from banks. D) Fund personal expenditures. Show Answer Correct Answer: A) File taxes. 19. What is the most likely reason Contractionary Fiscal Policy is not often implemented? A) It takes too long to work. B) It is unpopular to raise people's taxes. C) It works too quickly. D) It leads to increases in the national debt. Show Answer Correct Answer: B) It is unpopular to raise people's taxes. 20. Lowering the reserve requirement will reduce A) Unemployment. B) Inflation. Show Answer Correct Answer: A) Unemployment. ← 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