This quiz works best with JavaScript enabled. Home > Finance > Economics > Macroeconomics > Monetary And Fiscal Policy > Monetary And Fiscal Policy – Quiz 13 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Monetary And Fiscal Policy Quiz 13 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Which type of unemployment is due to changes in the business cycle? A) Frictional. B) Seasonal. C) Structural. D) Cyclical. Show Answer Correct Answer: D) Cyclical. 2. Under the Fed's "dual mandate, " they focus on both A) Full employment and stable prices. B) Full employment and maximum GDP growth. C) Maximum GDP growth and stable prices. D) None of above. Show Answer Correct Answer: A) Full employment and stable prices. 3. The Federal Reserve System is commonly called ..... A) The "tax collector". B) The "big apple". C) The "big bank". D) The "Fed". Show Answer Correct Answer: D) The "Fed". 4. In the market for real output, the initial effect of an increase in the money supply is to A) Shift the aggregate supply curve to the right. B) Shift the aggregate supply curve to the right. C) Shift the aggregate demand curve to the left. D) Shift the aggregate demand curve to the right. Show Answer Correct Answer: D) Shift the aggregate demand curve to the right. 5. When revenues exceed expenditures ..... A) There is a budget surplus. B) The government is forced to issue bonds. C) There is a budget deficit. D) The government must create more money. Show Answer Correct Answer: A) There is a budget surplus. 6. The occurrence of high inflation and unemployment at the same time A) Stagflation. B) Stop and go, on and off monetary policy. C) Expansionary monetary policy. D) Fiscal policy. Show Answer Correct Answer: A) Stagflation. 7. Assume that the central bank buys securities from member banks using open market operations, which of the following will decrease in the short run? A) Taxes. B) Interest rate. C) Discount rate. D) Investment. Show Answer Correct Answer: B) Interest rate. 8. Coins and currency A) Fractional Reserve Banking. B) Legal Reserves. C) Fiscal. D) Reserve system. Show Answer Correct Answer: B) Legal Reserves. 9. The Consumer Price Index (CPI) measures ..... A) Inflation. B) GDP. C) Unemployment. D) None of above. Show Answer Correct Answer: A) Inflation. 10. True or False:Tax fraud can result in prison time and monetary penalties. A) True. B) False. Show Answer Correct Answer: A) True. 11. If the Federal Reserve raises reserve requirements A) Money supply decreases. B) Money Supply Increases. Show Answer Correct Answer: A) Money supply decreases. 12. Another name for interest rate A) Federal reserve rate. B) Discount rate. C) Nasdaq. D) None of these. Show Answer Correct Answer: B) Discount rate. 13. Which of the following actions by the Fed would promote a tight money policy? A) Buying government securities. B) Announcing that it anticipates adopting an easy money policy. C) Increasing the reserve requirement. D) Decreasing the reserve requirement. Show Answer Correct Answer: C) Increasing the reserve requirement. 14. If the economy is in a recession, the Fed could do all of the following except A) Lower taxes. B) Buy Securities. C) Lower the Discount rate. D) Lower the Federal Funds rate. Show Answer Correct Answer: A) Lower taxes. 15. What is meant by the statement "money is a medium of exchange" ? A) Money is a measure of societal status. B) Money is a measure of a product's value. C) Money can be traded for goods and services. D) Money can be accumulated as a form of wealth. Show Answer Correct Answer: C) Money can be traded for goods and services. 16. If you want to slow down the economy, the Central Bank can ..... the money supply by ..... interest rates. A) Maintain, maintain. B) Increase, decreasing. C) Increase, increase. D) Decrease, increasing. Show Answer Correct Answer: D) Decrease, increasing. 17. What are the tools used by the government to implement fiscal policy? A) Taxation, government spending, and borrowing. B) Privatization of government assets. C) Raising interest rates. D) Printing new currency . Show Answer Correct Answer: A) Taxation, government spending, and borrowing. 18. Is a joint effort between the executive and legislative branches A) Monetary policy. B) Fiscal policy. Show Answer Correct Answer: B) Fiscal policy. 19. What is the general trend in federal tax rates over the past 30 years? A) Keeping tax rates steady and progressive. B) Lowering tax rates and making them less progressive. C) Increasing tax rates and making them more progressive. D) Abolishing federal taxes altogether. Show Answer Correct Answer: B) Lowering tax rates and making them less progressive. 20. The idea that the Government should take a hands off approach to the economy is a tenant of which type of economics? A) Keynesian. B) Schaubian. C) Supply-Side. D) Classical. Show Answer Correct Answer: D) Classical. 21. What is the primary task of the Federal Reserve System? A) Setting up rules for banks. B) Clearing checks and supplying currency. C) Regulating taxes and government spending. D) Controlling inflation and encouraging full employment. Show Answer Correct Answer: D) Controlling inflation and encouraging full employment. 22. Aggregate Demand increases, caused by the Federal Reserve A) Contractionary Fiscal Policy. B) Expansionary Fiscal Policy. C) Contractionary Monetary Policy. D) Expansionary Monetary Policy. Show Answer Correct Answer: D) Expansionary Monetary Policy. 23. During periods of high inflation, the Federal government can use this contractionary policy to slow the economy down. A) Increase taxes. B) Increase spending. C) Sell bonds. D) Decrease taxes. Show Answer Correct Answer: A) Increase taxes. 24. Fee charged by the Federal Reserve Bank for other member banks to borrow money from the FED through the discount window? A) Interest. B) Reserve requirement. C) Inflation. D) Discount rate. Show Answer Correct Answer: D) Discount rate. 25. In order to help the economy grow, the government will decrease or lower taxes. This allows people to have more money and buy more goods and services. A) Fiscal policy. B) Monetary policy. Show Answer Correct Answer: A) Fiscal policy. 26. True/False:Does money creation always mean printing more money? A) True. B) False. Show Answer Correct Answer: B) False. 27. Which policy is the following statement associated with? "The plan Obama sent to Congress today asks for higher taxes for corporations, banks and oil, natural gas and coal companies." A) Monetary Policy. B) Fiscal Policy. C) Both Monetary and Fiscal Policy. D) None of above. Show Answer Correct Answer: B) Fiscal Policy. 28. How does the central bank use monetary policy to control inflation? A) By adjusting interest rates, and ease of borrowing to influence the money supply and aggregate (total) demand in the economy. B) By controlling the exchange rate. C) By reducing taxes. D) By increasing government spending . Show Answer Correct Answer: A) By adjusting interest rates, and ease of borrowing to influence the money supply and aggregate (total) demand in the economy. 29. Disadvantages include unlimited liability, difficult to raise financial capital, difficulty attracting qualified employees, limited life A) Sole Propriotorship. B) Partnership. C) Corporation. D) None of above. Show Answer Correct Answer: A) Sole Propriotorship. 30. Brian received a 10% pay raise from last year. Because of this raise, he will pay a higher portion of his income in taxes. Which type of tax does this describe? A) Regressive. B) Progressive. C) Flat. D) Proportional. Show Answer Correct Answer: B) Progressive. ← 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