This quiz works best with JavaScript enabled. Home > Economics > Fiscal > Policy > Fiscal Policy – Quiz 13 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Fiscal Policy Quiz 13 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. The form used to report income and taxes owed to the government is called A) FASFA. B) W4. C) Income report. D) W2. Show Answer Correct Answer: D) W2. 2. This is government spending implemented through an appropriations bill and is an optional part of fiscal policy, A) Entitlement Spending. B) Supply. C) Discretionary Spending. D) Aggregate Supply. Show Answer Correct Answer: C) Discretionary Spending. 3. Which president's New Deal was the biggest fiscal policy spending programs in US History? A) Teddy Roosevelt. B) Lyndon Johnson. C) Franklin Roosevelt. D) Millard Fillmore. Show Answer Correct Answer: C) Franklin Roosevelt. 4. The Federal Reserve does all of the following EXCEPT A) Raise taxes and determine government spending. B) Act as the government's bank. C) Regulate banking activity. D) Provide check-clearing services to banks. Show Answer Correct Answer: A) Raise taxes and determine government spending. 5. If the economy is in a recession, the Federal Reserve could do all of the following EXCEPT A) Lower the discount rate. B) Lower taxes. C) Lower the required reserve ratio. D) Buy securities. Show Answer Correct Answer: B) Lower taxes. 6. A government wishes to stimulate economic recovery. Which action will assist this? A) Increasing indirect taxation. B) Decreasing income tax. C) Decreasing government investment. D) Increasing interest rates. Show Answer Correct Answer: B) Decreasing income tax. 7. Which combination of fiscal and monetary policy would speed up the economy? A) Increase taxes; decrease reserve requirement. B) Decrease taxes; decrease discount rate. C) Increase spending; increase interest on reserves. D) Decrease spending; sell bonds via open market operations. Show Answer Correct Answer: B) Decrease taxes; decrease discount rate. 8. What is the purpose of Fiscal Policy? A) Contribute to economic growth and stability. B) Keep rich people from getting too rich. C) Functions exactly like Fiscal Policy. D) Give Congress and the political parties more control of the economy. Show Answer Correct Answer: A) Contribute to economic growth and stability. 9. In which phase of the business cycle would the Federal Reserve implement Tight Money Policy? A) Peak. B) Contraction. C) Trough. D) Expansion. Show Answer Correct Answer: D) Expansion. 10. Lower discount rate, lower interest rates, lower reserve requirement A) Expansionary Monetary Policy. B) Contractionary Fiscal Policy. C) Contractionary Monetary Policy. D) Expansionary Fiscal Policy. Show Answer Correct Answer: A) Expansionary Monetary Policy. 11. This principle says that only those that use the good or service should pay the tax A) Benefits. B) Ability to Pay. C) Fiscal. D) Monetary. Show Answer Correct Answer: A) Benefits. 12. This seven member group supervises the banking system as part of the Federal Reserve System. A) Federal Advisory Council. B) Board of Governors. C) Federal Open Market Committee. D) Congressional Banking Committee. Show Answer Correct Answer: B) Board of Governors. 13. The total of all deficit spending in U.S. history is known as the A) National debt. B) National deficit. C) The U.S. budget. D) National balance. Show Answer Correct Answer: A) National debt. 14. Outside lag usually lasts A) Indeterminate. B) Six Weeks. C) Six Months. D) One Year. Show Answer Correct Answer: A) Indeterminate. 15. This is a paper component of the money supply, today consisting of Federal Reserve notes. A) Coins. B) Currency. C) Both coins and currency. D) Debit cards. Show Answer Correct Answer: B) Currency. 16. The economy is falling into recession and the Federal Reserve Bank decides to lower reserve requirements and the discount rate. What policy is being used? A) Contractionary Monetary Policy. B) Expansionary Monetary Policy. C) Expansionary Fiscal Policy. D) Contractionary Fiscal Policy. Show Answer Correct Answer: B) Expansionary Monetary Policy. 17. What is the main source of government spending? A) Social protection. B) Health. C) Defence. D) Education. Show Answer Correct Answer: A) Social protection. 18. Which of the following can result in price instability A) Total demand exceeding the capacity to produce goods and services. B) Inflationary shocks such as oil price increases, wars, etc. C) Money supply increasing too rapidly. D) All of these. Show Answer Correct Answer: D) All of these. 19. Which of these is not a government objective that fiscal policy is used to achieve? A) A balance in the balance of payments. B) Price stability. C) Low unemployment. D) Income and wealth distribution. Show Answer Correct Answer: D) Income and wealth distribution. 20. A tax of £10, 000 on all earnings is ..... A) An indirect tax. B) A proportional tax. C) A regressive tax. D) A progressive tax. Show Answer Correct Answer: C) A regressive tax. 21. Which is not a monetary policy measure? A) Changes in tax rates. B) Changes in interest rate. C) Changes in foreign exchange rate. D) Changes in money supply. Show Answer Correct Answer: A) Changes in tax rates. 22. 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. 23. Fiscal Policy has some problems including A) Slides. B) Sinks. C) Plugs. D) Lags. Show Answer Correct Answer: D) Lags. 24. There are ..... Federal Reserve Banks. A) 15. B) 12. C) 5. D) 10. Show Answer Correct Answer: B) 12. 25. Which of the following is not included in fiscal policy? A) Taxing. B) Profit Sharing. C) Government Spending. D) None of above. Show Answer Correct Answer: B) Profit Sharing. 26. Crowding out is caused by A) High interest rates crowd out borrowers who cant afford loans in a boom. B) Housing markets that demand exceeds supply. C) Government borrowing forces out private borrowing in a recession. D) None of above. Show Answer Correct Answer: C) Government borrowing forces out private borrowing in a recession. 27. In the United States, fiscal policy is made by what or whom? A) Executive order from the President. B) A process involving different branches of government. C) Central planners working for Congress. D) The actions of consumers and producers in the market. Show Answer Correct Answer: B) A process involving different branches of government. 28. How are monetary and fiscal policy different? A) Monetary is controlled by the FED. B) Fiscal Policy is controlled by the Government. C) Fiscal policy has very real ramification for the average American in terms of their ability to save and spend. D) All of these. Show Answer Correct Answer: D) All of these. 29. The sale and purchase of marketable federal government securities is known as A) Federal securities purchase. B) Open market operations. C) Contractionary operations. D) Expansionary policy. Show Answer Correct Answer: B) Open market operations. 30. Which of the following is NOT a limitation of fiscal policy? A) Mandatory spending can be changed. B) Lawmakers wait too long to change the policy. C) Lawmakers act in voters' self-interest. D) Federal and state fiscal policies conflict. Show Answer Correct Answer: A) Mandatory spending can be changed. ← 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