This quiz works best with JavaScript enabled. Home > Finance > Economics > Macroeconomics > Monetary And Fiscal Policy > Monetary And Fiscal Policy – Quiz 14 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Monetary And Fiscal Policy Quiz 14 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Debt is an accumulation of surpluses and deficits where the surpluses are greater than the deficits A) False. B) True. Show Answer Correct Answer: A) False. 2. During an economic recession, which fiscal policy action is likely to be effective in stimulating economic growth? A) Decreasing government spending and lowering taxes. B) Increasing government spending and lowering taxes. C) Increasing government spending and raising taxes. D) Decreasing government spending and raising taxes. Show Answer Correct Answer: B) Increasing government spending and lowering taxes. 3. The problem of higher gap between the lower and the higher income group. A) Macroeconomics. B) Microeconomics. Show Answer Correct Answer: A) Macroeconomics. 4. When inflation is high, the federal reserve may want to control inflation by A) Increasing loan rates to discourage people from borrowing money. B) Decreasing loan rates to encourage people to borrow money. Show Answer Correct Answer: A) Increasing loan rates to discourage people from borrowing money. 5. Which are contractionary fiscal policies ..... meant to slow down speedy economic growth? A) Increased taxation and increased government spending. B) Increased taxation and decreased government spending. C) Decreased taxation and no change in government spending. D) No change in taxation and increased government spending. Show Answer Correct Answer: B) Increased taxation and decreased government spending. 6. What is one of the causes of inflation? A) Increase in interest rates. B) Decrease in money supply. C) Decrease in consumer spending. D) Increase in government spending. Show Answer Correct Answer: D) Increase in government spending. 7. An item that maintains its economic worth over time: A) Unit of account. B) Store of Value. C) Medium of Exchange. D) Currency. Show Answer Correct Answer: B) Store of Value. 8. Finish the statement:Monetary policy affects the ....., primarily through changing ..... A) Federal Reserve, printing money. B) Budget, fiscal policy. C) Money supply, interest rates. D) Interest rates, reserve requirement. Show Answer Correct Answer: C) Money supply, interest rates. 9. Who is the chairman of the Federal Reserve? A) Janet Yellen. B) John G. Roberts. C) Jerome Powell. D) Mike Pence. Show Answer Correct Answer: C) Jerome Powell. 10. Which of the following is NOT one of the characteristics of money A) Portable. B) Limited Supply. C) Durable. D) Medium of Exchange. Show Answer Correct Answer: D) Medium of Exchange. 11. The goals of monetary policy do NOT include the promotion of ..... A) Maximum employment. B) High government spending. C) Moderate long-term interest rates. D) Stable prices. Show Answer Correct Answer: B) High government spending. 12. If inflation reaches 5% which of the following is true A) Decrease reserve requirement. B) Want to increase the money supply. C) Decrease government spending. D) Buy bonds. Show Answer Correct Answer: C) Decrease government spending. 13. What is medium of exchange? A) M1. B) Legal tender. C) A means of payment. D) Gives value to object. Show Answer Correct Answer: C) A means of payment. 14. When banks borrow money from the FED, their reserves A) Increase. B) Decrease. Show Answer Correct Answer: A) Increase. 15. Which of the following is NOT an objective of monetary policy A) Inflation between 2-3%. B) Equal distribution of income. C) Full employment. D) Economic prosperity. Show Answer Correct Answer: B) Equal distribution of income. 16. Metallic forms of money such as pennies, nickles, dimes, and quarters. A) Coins and currency. B) Currency. C) Coins. D) Debit cards. Show Answer Correct Answer: C) Coins. 17. Contractionary policy tries to fix the problem of ..... A) Stagflation. B) Demand-pull inflation. C) Cost-push inflation. D) Success. Show Answer Correct Answer: B) Demand-pull inflation. 18. The general increase of price levels? A) Inflation. B) Deflation. C) Consumer price index. D) Aggregate demand. Show Answer Correct Answer: A) Inflation. 19. Federal Funds Rate A) The interest rate at which a depository institution lends funds that are immediately available to another depository institution overnight. B) The federal reserve's responsibility to use monetary policy to promote maximum employment and price stability. C) Limit set on the government regarding how much they can borrow. D) Interest rate on house mortgage. Show Answer Correct Answer: A) The interest rate at which a depository institution lends funds that are immediately available to another depository institution overnight. 20. The goal of contractionary fiscal or monetary policy is A) To decrease unemployment and increase economic growth. B) To increase inflation. C) To decrease inflation. D) To increase unemployment and decrease economic growth. Show Answer Correct Answer: C) To decrease inflation. 21. Which of these would be the appropriate use of Fiscal and Monetary Policy to correct recession? A) Buy bonds and raise government spending. B) Sell bonds and raise government spending. C) Raise interest rate and raise taxes. D) Raise interest rate and lower taxes. Show Answer Correct Answer: A) Buy bonds and raise government spending. 22. When interest rates are high A) People and businesses buy less and save more. B) People and businesses buy more and save less. C) People and businesses do not change their behavior. D) None of above. Show Answer Correct Answer: A) People and businesses buy less and save more. 23. The process of banks recording whose account gives up and whose account receives money when a customer writes a check is called A) Check Cashing. B) Check Clearing. C) Check Cycle. D) None of the Above. Show Answer Correct Answer: B) Check Clearing. 24. Budget deficit is a condition when expenditures is higher than revenue A) True. B) False. Show Answer Correct Answer: A) True. 25. ..... is the largest category of mandatory spending, and ..... is the largest category of discretionary spending. A) Medicare / defense. B) Social security / defense. C) Medicaid / social security. D) Defense / social security. Show Answer Correct Answer: B) Social security / defense. 26. What is one tool that measures the rate of inflation? A) Consumer price index. B) GDP. C) Unemployment. D) Federal Reserve. Show Answer Correct Answer: A) Consumer price index. 27. The organization responsible for the monetary policy of the United States is A) Treasury Department. B) Federal Reserve. C) Executive Department. D) Congress. Show Answer Correct Answer: B) Federal Reserve. 28. This seven member group supervises the banking system as part of the Federal Reserve System. A) Board of Governors. B) Congressional Banking Committee. C) Federal Advisory Council. D) Federal Open Market Committee. Show Answer Correct Answer: A) Board of Governors. 29. Which of the following is not one of the reasons that the Federal Reserve System was created? A) There were too many bank panics. B) The economy had too many boom and bust periods. C) It was a way to create more jobs in the economy. D) The banking system was very unstable. Show Answer Correct Answer: C) It was a way to create more jobs in the economy. 30. True/False:The steps that the federal government takes to influence the economy is monetary policy A) True. B) False. Show Answer Correct Answer: B) False. ← 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