This quiz works best with JavaScript enabled. Home > Economics > Macroeconomics > Monetary And Fiscal Policy > Monetary And Fiscal Policy – Quiz 7 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Monetary And Fiscal Policy Quiz 7 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. According to the Keynesian school's view of the aggregate supply curve, how will a decrease in the interest rate of an economy impact the level of real output and the average price level when the economy is operating at full employment? A) A higher level of real output and higher average price level. B) No change in the level of real output and a higher average price level. C) A lower level of real output and no change in the average price level. D) It will depend on whether or not the economy is operating at full capacity. Show Answer Correct Answer: B) No change in the level of real output and a higher average price level. 2. Which of the following best defines "gift tax" ? A) Tax on donation of money or wealth. B) Tax on people's earnings. C) Tax on the manufacture or sale of certain items. D) Tax on the transfer of property when someone dies. Show Answer Correct Answer: A) Tax on donation of money or wealth. 3. An decrease in government spending or an increase in taxes A) Monetary policy. B) Fiscal policy. C) Expansionary policy. D) Contractionary policy. Show Answer Correct Answer: D) Contractionary policy. 4. Houston is in the ..... district A) Saint Anthony. B) Dallas. C) Houston. D) Step. Show Answer Correct Answer: B) Dallas. 5. What is a tax that increases as income increases A) Regressive Tax. B) Proportional Tax. C) Progressive Tax. D) None of above. Show Answer Correct Answer: C) Progressive Tax. 6. Contractionary Monetary Policy should be used ..... A) During Recession. B) During Inflation. C) During a budget deficit year. D) When the economy is in equilibrium. Show Answer Correct Answer: B) During Inflation. 7. Which is an example of proportional tax? A) Death tax. B) Sales tax. C) Federal income tax. D) Corporate income tax. Show Answer Correct Answer: B) Sales tax. 8. Transactions (buying/selling) are made easier because of this function of money that eliminates the need to barter (trade goods for goods). A) Store of Value. B) Medium of Exchange. C) Unit of Account. D) Divisibility. Show Answer Correct Answer: B) Medium of Exchange. 9. If inflation is too high, the Federal Reserve should ..... the federal funds rate. A) Increase. B) Decrease. Show Answer Correct Answer: A) Increase. 10. Which of the following describes fiscal policy? A) The Federal Reserve and Congress work together to balance the federal budget. B) Congress and the President make tax and spending decisions to stabilize the economy. C) The Federal Reserve uses its tools to stabilize the economy by changing the money supply. D) The President nominates someone to lead the Department of Treasury, while the Senate confirms the nomination. Show Answer Correct Answer: B) Congress and the President make tax and spending decisions to stabilize the economy. 11. If the FED wants to correct inflation, they can A) Buy bonds. B) Lower the discount rate. C) Lower the reserve requirement. D) All of these. E) None of these. Show Answer Correct Answer: E) None of these. 12. On your paycheck stub, net income is ..... A) Not usually disclosed to you. B) The same as take-home pay. C) The total amount earned. D) The amount taken out of your paycheck. Show Answer Correct Answer: B) The same as take-home pay. 13. Changes the government makes in spending or taxation to achieve particular economic goals A) Monetary policy. B) Fiscal policy. C) Expansionary policy. D) Contractionary policy. Show Answer Correct Answer: B) Fiscal policy. 14. Voting members of the FOMC include 7 members of the ..... and Presidents of the 12 district banks. A) Board of Governors. B) Senate. C) Financial Institution League. D) President's Council. Show Answer Correct Answer: A) Board of Governors. 15. The branch of economics that studies the performance of the nation's economy as a whole is known as A) Microeconomics. B) Macroeconomics. C) Gross Domestic Product. D) Fiscal Policy. Show Answer Correct Answer: B) Macroeconomics. 16. The Federal Government lowers taxes A) Expansionary Fiscal Policy. B) Expansionary Monetary Policy. C) Contractionary Fiscal Policy. D) Contractionary Monetary Policy. Show Answer Correct Answer: A) Expansionary Fiscal Policy. 17. QE involves central bank A) Bond sales to the private sector. B) Bond purchases from the private sector. C) Money printing. D) Raising Bank Rate. Show Answer Correct Answer: B) Bond purchases from the private sector. 18. Stimulus checks, lower interest rates, decrease in the reserve requirement and lower taxes are all examples of A) Monetary Policy. B) Fiscal Policy. C) Contractionary Policy. D) Expansionary Policy. Show Answer Correct Answer: D) Expansionary Policy. 19. The central bank requirement to keep a certain percentage of money at the bank is know as the ..... A) Reserve requirement (rate, ratio). B) Discount rate. C) Mutual fund. D) Prime (interest ) rate. Show Answer Correct Answer: A) Reserve requirement (rate, ratio). 20. ..... is a rate that a bank pays customers for keeping their money A) Collateral. B) Interest. C) Currency. D) Deposit. Show Answer Correct Answer: B) Interest. ← 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 8Monetary And Fiscal Policy Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books