This quiz works best with JavaScript enabled. Home > Economics > Fiscal > Policy > Fiscal Policy – Quiz 11 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Fiscal Policy Quiz 11 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. When the economy goes into a recession and the fiscal policy stimulates aggregate demand without policy makers making any deliberate action. What is an ..... A) Contractionary fiscal policy. B) Automatic stabilizer. C) Laissez faire. D) Economic stabilizer. Show Answer Correct Answer: B) Automatic stabilizer. 2. Cutting or decreasing which of the following would be an example of expansionary fiscal policy? A) Government spending. B) Income taxes. C) Workers' wages. D) Production of consumer goods. Show Answer Correct Answer: B) Income taxes. 3. Houston is in the ..... district A) San Antonio. B) Dallas. C) Houston. D) El Paso. Show Answer Correct Answer: B) Dallas. 4. What are the 2 basic tools the federal government uses to influence the economy A) Entitlements and spending. B) Entitlements and wages. C) Taxation and spending. D) Taxation and wages. Show Answer Correct Answer: C) Taxation and spending. 5. How many districts make up the regional component of the Federal Reserve? A) 9. B) 7. C) 12. D) 13. Show Answer Correct Answer: C) 12. 6. If the inflation rate is rising too fast, which fiscal policy would make the MOST sense? A) Increase taxes. B) Decrease taxes. C) Decrease bank reserves. D) Increase spending. Show Answer Correct Answer: A) Increase taxes. 7. In the product market, firms are willing to accept money as payment for their goods and services. In this example, money serves as A) A store of value. B) A medium of exchange. C) A unit of account. D) A standard of value. Show Answer Correct Answer: B) A medium of exchange. 8. Amount of deposits that banks are required to keep on hand A) Monetary policy. B) Reserve requirements. C) Prime rate. D) Money creation. Show Answer Correct Answer: B) Reserve requirements. 9. ..... is the largest category of mandatory spending, and ..... is the largest category of discretionary spending. A) Medicare / defense. B) Medicaid / social decurity. C) Defense / social security. D) Social security / defense. Show Answer Correct Answer: D) Social security / defense. 10. The expanding number of markets that countries must trade with to maintain their standard of living A) Trade advantage. B) Globalization. C) Tariffs. D) Domestic jobs. Show Answer Correct Answer: B) Globalization. 11. The expansion or contraction of the money supply in order to influence the cost and the availability of credit is A) Expansionary Policy. B) Monetary Policy. C) Contractionary Policy. D) Fiscal Policy. Show Answer Correct Answer: B) Monetary Policy. 12. How does the Federal Reserve regulate the US monetary policy? A) Adjusting the short-term interest rates. B) Adjusting the long-term interest rates. C) Adjusting short-term taxes. D) Adjusting long-term taxes. Show Answer Correct Answer: A) Adjusting the short-term interest rates. 13. If the government takes in more than it spends it is known as A) Budget surplus. B) Balanced budget. C) Discretionary budget. D) Budget deficit. Show Answer Correct Answer: A) Budget surplus. 14. The general increase of price levels? A) Inflation. B) Deflation. C) Consumer price index. D) Aggregate demand. Show Answer Correct Answer: A) Inflation. 15. What is the tax multiplier formula A) -MPC/MPS. B) MPC/-MPS. C) MPC-(MPS/2). D) MPS x-MPC. Show Answer Correct Answer: A) -MPC/MPS. 16. The Federal Open Market Committee sells bonds. What type of policy is this? A) Expansionary Fiscal. B) Contractionary Monetary. C) Contractionary Fiscal. D) Expansionary Monetary. Show Answer Correct Answer: B) Contractionary Monetary. 17. Franklin Roosevelt's New Deal program is an example of the use of ....., A) Keynesian economics. B) Laissez faire. C) Supply side economics. D) Adam Smith's theory of the invisible hand. Show Answer Correct Answer: A) Keynesian economics. 18. A budget surplus occurs when A) Government spending is less than government revenue. B) Government spending exceeds government revenue. C) Export revenue is more than import expenditure. D) Government spending equals government revenue. Show Answer Correct Answer: A) Government spending is less than government revenue. 19. Who proproses the National budget A) Congress. B) President. C) Justices. D) None of above. Show Answer Correct Answer: B) President. 20. Money must be scarce. Scarce means A) Easily identified. B) Unlimited in supply. C) Limited in supply. D) Long lasted. Show Answer Correct Answer: C) Limited in supply. 21. These programs of the federal government include Medicaid, Medicare, Social Security, Unemployment and Welfare Programs. A) Entitlement Programs. B) Expansionary Program. C) Discretionary Spending. D) Fiscal Policy. Show Answer Correct Answer: A) Entitlement Programs. 22. Higher Income = Lower Taxes A) Regressive. B) Progressive. C) Proportional. D) None of above. Show Answer Correct Answer: A) Regressive. 23. Receiving a welfare check A) Expansionary and discretionary. B) Expansionary and automatic. C) Contractionary and discretionary. D) Contractionary and automatic. Show Answer Correct Answer: B) Expansionary and automatic. 24. Money must be durable. Durable means A) Easily identified. B) Limited in supply. C) Easy to carry. D) Long lasting. Show Answer Correct Answer: D) Long lasting. 25. One of the functions of money is that it must be easily recognized. Recognizable means A) Identified. B) Durable. C) Agreed upon. D) Scarce. Show Answer Correct Answer: A) Identified. 26. The interest rate the Fed charges other banks A) Prime rate. B) Monetarism. C) Discount rate. D) Open market operations. Show Answer Correct Answer: C) Discount rate. 27. The largest category of spending for state and local governments is ..... A) Highways. B) Education. C) Fire and Police. D) Medical Costs. Show Answer Correct Answer: B) Education. 28. The tools of fiscal policy are ..... A) Interest rates. B) Taxes and Government spending. C) Checks and balances. D) Open market operations. Show Answer Correct Answer: B) Taxes and Government spending. 29. How are monetary policy and fiscal policy similar? A) They are both done by the President. B) They are both done by the Fed. C) They are both used to keep the economy stable. D) They both use four tools. Show Answer Correct Answer: C) They are both used to keep the economy stable. 30. This amount is the sum of all money the government has borrowed A) National Debt. B) Budget Deficit. C) Budget Surplus. D) Tight Money. Show Answer Correct Answer: A) National Debt. ← PreviousNext →Related QuizzesFiscal QuizzesEconomics QuizzesFiscal Policy Quiz 1Fiscal Policy Quiz 2Fiscal Policy Quiz 3Fiscal Policy Quiz 4Fiscal Policy Quiz 5Fiscal Policy Quiz 6Fiscal Policy Quiz 7Fiscal Policy Quiz 8 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books