This quiz works best with JavaScript enabled. Home > Finance > Economics > Macroeconomics > Monetary And Fiscal Policy > Monetary And Fiscal Policy – Quiz 10 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Monetary And Fiscal Policy Quiz 10 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. FICA includes taxes to pay for ..... A) Social Security and Medicare. B) Social Security and Unemployment. C) Unemployment and Medicare. D) Medicare and Workers Compensation. Show Answer Correct Answer: A) Social Security and Medicare. 2. Which policies counteract (go against) each other A) Increasing taxes and selling bonds. B) Increasing government spending and selling bonds. C) Decreasing taxes and decreasing reserve requirement. D) Decreasing government spending and increasing the reserve requirement. Show Answer Correct Answer: B) Increasing government spending and selling bonds. 3. Randy makes $ 40, 000 and pays 50% in taxes. Greg makes $ 20, 000 and pays 20% in taxes. Lindsey makes $ 10, 000 and pays 5% in taxes. This is an example of ..... A) Regressive tax. B) Progressive tax. C) Sales tax. D) Proportional tax. Show Answer Correct Answer: B) Progressive tax. 4. The largest source of federal government revenue (what they bring in) is ..... A) Corporate income taxes. B) FICA. C) Excise taxes. D) Personal income taxes. Show Answer Correct Answer: D) Personal income taxes. 5. All of the following will decrease the money supply EXCEPT? A) Selling Bonds. B) Decreasing the Reserve Requirement. C) Increasing the Reserve Requirement. D) Increasing the Discount Rate. Show Answer Correct Answer: B) Decreasing the Reserve Requirement. 6. What monetary policy tools are available to the Federal Reserve A) Changing the RRR. B) Changing the Discount Rate. C) Federal Open Market Operations. D) All of the Above. Show Answer Correct Answer: D) All of the Above. 7. To much money in our economy leads to A) Inflation. B) Recession. Show Answer Correct Answer: A) Inflation. 8. If the Fed lowers the discount rate, what will be the economic effect? A) Expands the money supply. B) Decrease the money supply. Show Answer Correct Answer: A) Expands the money supply. 9. If the Fed purchases government securities, what will happen to the economy? A) Decrease money supply. B) Increase money supply. Show Answer Correct Answer: B) Increase money supply. 10. Buying or selling of government securities (bonds). Buying increases money supply, selling decreases money supply A) Inflation. B) Reserve Requirement. C) Discount Rate. D) Open Market Operations. Show Answer Correct Answer: D) Open Market Operations. 11. How are fiscal and monetary policy goals similar? A) They both use the same economic tools to fix economic problems. B) They both try to promote economic growth and stability. C) They always require 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 growth and stability. 12. Real Bank Rate in the UK at present is A) Positive. B) Zero. C) High. D) Negative. Show Answer Correct Answer: D) Negative. 13. What is the number of televisions produced in Malaysia? A) Macroeconomics. B) Microeconomics. Show Answer Correct Answer: B) Microeconomics. 14. Use the scenario to answer the following question. Alberto is a carpenter and he needs a new saw in order to make more cabinets to sell to his buyers. To do this, he sells a bench he has made, and uses the money to purchase a new saw. What can one conclude about the function of money in this scenario? A) Alberto is using money as a unit of account. B) Alberto is using money as a medium of exchange. C) Alberto is using money as a means of deferring payment. D) Alberto is using money as a store of value. Show Answer Correct Answer: B) Alberto is using money as a medium of exchange. 15. Which of the following has the longest maturity period? A) Treasury Note. B) Treasury Bond. C) Treasury Note. D) They are all the same. Show Answer Correct Answer: B) Treasury Bond. 16. The school of economic thought that says that free markets will self-correct and do not need government intervention is ..... A) Keynesian economics. B) Monetarism. C) Classical economics. D) Economics for the people. Show Answer Correct Answer: C) Classical economics. 17. The interest rate the FED charges banks A) Discount rate. B) Prime rate. C) Federal funds rate. D) Commercial interest rate. Show Answer Correct Answer: A) Discount rate. 18. The Federal Open Market Committee can buy and sell government securities/bonds. Which of the following tools of monetary policy does this describe? A) Open market operations. B) Reserve requirement. C) Discount rate. D) Interest on excess reserves. Show Answer Correct Answer: A) Open market operations. 19. If credit and borrowing are expanding, which of the following is false A) Decrease taxes. B) Decrease government spending. C) Sell bonds. D) Want to decrease the money supply. Show Answer Correct Answer: A) Decrease taxes. 20. To increase money supply the Federal Reserve will A) Sell bonds to banks. B) Buy bonds from banks. C) Sell bonds to the government. D) None of above. Show Answer Correct Answer: B) Buy bonds from banks. 21. If the marginal propensity to consume MPC is 0.75, the value of the multiplier is A) 5. B) 4. C) 0.75. D) 7.5. Show Answer Correct Answer: B) 4. 22. Which of the following people were proponents of Supply-side economics A) JFK. B) FDR. C) Herbert Hoover. D) Ronald Reagan. Show Answer Correct Answer: D) Ronald Reagan. 23. Raising the discount rate will reduce A) Unemployment. B) Inflation. Show Answer Correct Answer: B) Inflation. 24. Monetary Policy is implemented by A) The Federal Budget. B) Central Bank. C) Congress and the President. D) Taxing and govt. spending. Show Answer Correct Answer: B) Central Bank. 25. When was the Federal Reserve System created? A) 1920. B) 1913. C) 1930. D) 1900. Show Answer Correct Answer: B) 1913. 26. The total unemployment in entire Malaysian economy rises. A) Microeconomics. B) Macroeconomics. Show Answer Correct Answer: B) Macroeconomics. 27. The Fed wants to fight inflation. What action should they take regarding the discount rate, the Reserve Requirement, or government securities? A) Adopt Contractionary fiscal policy & decrease spending. B) Adopt tight monetary policy & raise the rates. C) Adopt easy monetary policy & lower the rates. D) Adopt Expansionary fiscal policy & decrease taxes. Show Answer Correct Answer: B) Adopt tight monetary policy & raise the rates. 28. When the Fed buys securities, what effect does this have on GDP? A) Easy Monetary Policy, Increase. B) Easy Monetary Policy, Decrease. C) Tight Monetary Policy, Increase. D) Tight Monetary policy, Decrease. Show Answer Correct Answer: A) Easy Monetary Policy, Increase. 29. How do environmental policies impact businesses and consumers? A) Environmental policies have no impact on businesses and consumers. B) Environmental policies can impose regulations and costs for compliance on businesses, while also creating opportunities for innovation and sustainable practices. Consumers may experience changes in prices, availability of products, and environmental impact of their purchases. C) Environmental policies lead to decreased innovation and higher costs for businesses, while consumers experience no changes. D) Environmental policies only benefit businesses and consumers . Show Answer Correct Answer: B) Environmental policies can impose regulations and costs for compliance on businesses, while also creating opportunities for innovation and sustainable practices. Consumers may experience changes in prices, availability of products, and environmental impact of their purchases. 30. The FDIC (Federal Depositor's Insured Corporation) which insures individual bank deposits was established to make sure that A) Depositors do not lose money if a bank fails. B) Banks do not fail. C) Banks charge a fair amount of interest on loans. D) The government has enough gold to cover its expenses. Show Answer Correct Answer: A) Depositors do not lose money if a bank fails. ← 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