Monetary And Fiscal Policy Quiz 18 (17 MCQs)

Quiz Instructions

Select an option to see the correct answer instantly.

1. Banks create money when .....

Correct Answer: A) They make loans.

2. Interest Rates that the Fed charges banks

Correct Answer: A) Discount Rate.

3. The goals of all monetary supply is .....

Correct Answer: B) Price stability and maximum employment.

4. Tools of Fiscal Policy are

Correct Answer: A) Spending, borrowing, raising or lowering taxes.

5. Lower discount rate, lower interest rates, lower reserve requirement

Correct Answer: D) Expansionary Monetary Policy.

6. Who makes sure bank customers do not lose their money if a bank fails

Correct Answer: B) FDIC.

7. What can the government do to slow the economy in order to reduce inflation?

Correct Answer: B) Raise taxes.

8. Which of the following can result in price instability

Correct Answer: D) All of these.

9. What will the Federal Reserve Board do if retail sales a way down from last year and so are housing sales

Correct Answer: C) Decrease the discount rate.

10. Which of the following best describes the goal of Monetary Policy?

Correct Answer: A) Controlling the money supply.

11. Which team scored the most points in one game?

Correct Answer: A) Georgia Tech.

12. The Fed is .....

Correct Answer: B) Independent of the government.

13. When does the Fed impose an easy money policy

Correct Answer: B) During a contraction.

14. In order to slow the economy, the FED may ..... the reserve requirements and there will be less money to loan out to people.

Correct Answer: C) Increase.

15. Which of the following is NOT one of the functions of money?

Correct Answer: D) Uniform.

16. The Fed deciding to buy or sell government bonds are known as

Correct Answer: C) Open Market Operations.

17. Monetary Policies are based on this

Correct Answer: B) Reserve system.