This quiz works best with JavaScript enabled. Home > Finance > Economics > Macroeconomics > Monetary And Fiscal Policy > Monetary And Fiscal Policy – Quiz 11 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Monetary And Fiscal Policy Quiz 11 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Kendall makes $ 40, 000 per year and has a tax rate of 20%. Kaitlin makes $ 150, 000 per year and has a tax rate of 20%. What type of tax is this? A) Fair. B) Proportional. C) Progressive. D) Regressive. Show Answer Correct Answer: B) Proportional. 2. The idea that money is fungible/substitutable and can be used to value goods and services. A) Medium of exchange. B) Store of value. C) Unit of account. D) Bartering. Show Answer Correct Answer: C) Unit of account. 3. The action by the FED to adjust the size of the money supply, and to adjust interest rates in order to keep prices down and employment high. A) Fiscal policy. B) Monetary policy. Show Answer Correct Answer: B) Monetary policy. 4. The initial impact of an increase in government spending is to shift A) Aggregate demand to the right. B) Aggregate demand to the left. C) Aggregate supply to the right. D) Aggregate supply to the left. Show Answer Correct Answer: A) Aggregate demand to the right. 5. Decreasing Taxes will cause people to work more is a fundamental ideal of: A) Laissez-Faire Economics. B) Supply-Side Economics. C) Classical Economics. D) Keynesian Economics. Show Answer Correct Answer: B) Supply-Side Economics. 6. Whose job is it to control the money supply? A) The Executive Branch of Government. B) Federal Reserve. C) President. D) None of above. Show Answer Correct Answer: B) Federal Reserve. 7. Expansionary Monetary Policy involves increasing the money supply and govt. spending A) False. B) True. Show Answer Correct Answer: A) False. 8. Increasing the RRR will do what to the money supply? A) Increase. B) Decrease. C) No Effect. D) All of the Above. Show Answer Correct Answer: B) Decrease. 9. When making a deposit into a financial institution, such as a bank, this BEST reflects which function of money? A) Store of Value. B) Standard of Value. C) Unit of Account. D) Medium of Exchange. Show Answer Correct Answer: A) Store of Value. 10. A sales tax is a..... A) Proportional tax. B) Sales tax. C) Regressive tax. D) Progressive tax. Show Answer Correct Answer: C) Regressive tax. 11. The sum of all deficits A) National Deficit. B) Fiscal Cliff. C) Debt Ceiling. D) National Debt. Show Answer Correct Answer: D) National Debt. 12. What form of Economics is better known as demand-side economics? A) Classical. B) Supply-Side. C) Keynesian. D) All of the Above. Show Answer Correct Answer: C) Keynesian. 13. Will the following slow down the economy or stimulate the economy:lower taxes A) Slow down. B) Stimulate. C) No economic change. D) None of above. Show Answer Correct Answer: B) Stimulate. 14. What is the purpose of a budget deficit in fiscal policy? A) To indicate a healthy economy with high government revenue. B) To signify that the government is overspending and not managing its finances well. C) To fund essential public services and stimulate economic growth when necessary. D) To demonstrate a surplus in government accounts. Show Answer Correct Answer: C) To fund essential public services and stimulate economic growth when necessary. 15. If a country is experiencing high inflation, what type of monetary policy action is the central bank likely to take? A) Increase interest rates and sell government securities. B) Decrease interest rates and buy government securities. C) Increase government spending and reduce taxes. D) Decrease government spending and increase taxes. Show Answer Correct Answer: A) Increase interest rates and sell government securities. 16. Expansionary Fiscal 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) Increase the money supply by purchasing securities and Decrease interest rates help stimulate the economy. D) None of above. Show Answer Correct Answer: A) Increase government spending and Decrease taxes to help stimulate the economy. 17. Which is NOT one of government's role in the economy? A) Protecting property rights. B) Maintaining competition. C) Protecting consumers, savers, and investors. D) Protecting monopolistic corporations. Show Answer Correct Answer: D) Protecting monopolistic corporations. 18. An example of Contractionary Fiscal policy A) Tight Money Policy. B) Increasing Government Spending. C) Decreasing Government Spending. D) Cutting Taxes. Show Answer Correct Answer: C) Decreasing Government Spending. 19. Which of the following people were proponents of classical economics A) JFK. B) Herbert Hoover. C) Arthur Laffer. D) Ronald Reagan. Show Answer Correct Answer: B) Herbert Hoover. 20. The actions the Fed takes to influence the level of real GDP and the rate of inflation in a country A) Fiscal Policy. B) Monetary Policy. Show Answer Correct Answer: B) Monetary Policy. 21. In a contractionary monetary policy, the central bank might: A) Increase the money supply and lower interest rates. B) Decrease the money supply and raise interest rates. C) Increase government spending and lower taxes. D) Decrease government spending and raise taxes. Show Answer Correct Answer: B) Decrease the money supply and raise interest rates. 22. Expansionary fiscal policies are laws aimed at reducing unemployment. How might Congress use discretionary expansionary fiscal policy? A) Decrease the discount rate. B) Increase taxes. C) Decrease government spending. D) Increase government spending and decrease taxes. Show Answer Correct Answer: D) Increase government spending and decrease taxes. 23. Which of the following tools of fiscal policy would decrease unemployment? A) Increase government spending. B) Increase tax rates. C) Increase the reserve requirement. D) Decrease the discount rate. Show Answer Correct Answer: A) Increase government spending. 24. Which is a key characteristic of an automatic stabilizer? A) They take time to be implemented. B) They occur automatically based on the phase of the business cycle we are in. C) They must be paid back to the government. D) Only corporations have access to automatic stabilizers. Show Answer Correct Answer: B) They occur automatically based on the phase of the business cycle we are in. 25. How does a budget surplus relate to the national debt? A) Budget surplus are more than the national debt. B) Budget surplus create the national debt. C) They are the same thing. D) Budget surplus reduce the size of the national debt. Show Answer Correct Answer: D) Budget surplus reduce the size of the national debt. 26. When the supply and demand for money are expressed in a graph with the interest rate on the vertical axis and the quantity of money on the horizontal axis, an increase in the price level A) Shifts money demand to the right and increases the interest rate. B) None of these answers. C) Shifts money demand to the right and decreases the interest rate. D) Shifts money demand to the left and increases the interest rate. Show Answer Correct Answer: A) Shifts money demand to the right and increases the interest rate. 27. When the FOMC engages in buying and selling of US securities it is called ..... A) Fiscal policy. B) Stock operations. C) Open market operations. D) Tax and spend policy. Show Answer Correct Answer: C) Open market operations. 28. Which of the following is an example of "supply-side" economics? A) Higher federal taxes. B) Trying to increase aggregate demand. C) More government agencies and oversight. D) Reduced government regulation. Show Answer Correct Answer: D) Reduced government regulation. 29. Increasing taxing & decreasing government spending to slow the economy is referred to as A) Contractionary policy. B) Monetary policy. C) Budget surplus. D) Budget deficit. Show Answer Correct Answer: A) Contractionary policy. 30. Money functions as a ..... A) Medium of exchange. B) Measure of value. C) Store of value. D) All of the above. Show Answer Correct Answer: D) All of the above. ← 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