This quiz works best with JavaScript enabled. Home > Economics > Fiscal > Policy > Fiscal Policy – Quiz 15 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Fiscal Policy Quiz 15 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. The amount of money in the economy at a particular point in time is known as A) Credit creation. B) Monetary policy. C) Notes and coins. D) The money supply. Show Answer Correct Answer: D) The money supply. 2. In order for money to have value, it must have all of the following characteristics EXCEPT A) Plentiful availability. B) Divisibility. C) Portability. D) Durability. Show Answer Correct Answer: A) Plentiful availability. 3. Sustained upward movement in the price of goods and services (price increase over time) A) Interest rates. B) Inflation. C) Discount rates. D) Reserve requirements. Show Answer Correct Answer: B) Inflation. 4. A surplus budget is one where A) Spending on imports exceeds export earnings. B) Government revenue exceeds government expenditure. C) Spending on imports is less than export earnings. D) Government revenue is less than government spending. Show Answer Correct Answer: B) Government revenue exceeds government expenditure. 5. Fiscal policy during periods of inflation is likely to be ..... A) Expansionary. B) Contractionary. C) Both Expansionary and Contractionary. D) Neither Expansionary note Contractionary. Show Answer Correct Answer: B) Contractionary. 6. Which of the following best defines "estate tax" ? A) Tax on the transfer of property when someone dies. B) Tax on the manufacture or sale of certain items. C) Tax on donation of money or wealth. D) Tax on people's earnings. Show Answer Correct Answer: A) Tax on the transfer of property when someone dies. 7. What is the factor by which a change in both spending and taxes affect real GDP A) Multiplier effect. B) Balanced budget multiplier. C) Lump-sum tax. D) None of above. Show Answer Correct Answer: B) Balanced budget multiplier. 8. The amount of money the federal government collects is called A) Budget. B) Revenue. C) Funding. D) Deficit. Show Answer Correct Answer: B) Revenue. 9. The SARB wants to reduce the nation's money supply. This could be accomplished by doing all of the following EXCEPT A) Decreasing the repo rate. B) Increasing the reserve requirement. C) Selling securities on the open market. D) Making banks hold a reserve for all types of deposits. Show Answer Correct Answer: A) Decreasing the repo rate. 10. Which action increases the money supply? A) The federal gov. increases personal income taxes. B) The federal gov. decreases government spending. C) The Fed raises the discount rate. D) The Fed BUYS bonds on the market. Show Answer Correct Answer: D) The Fed BUYS bonds on the market. 11. The Federal Reserve would do which of the following in order to expand the economy? A) Raise the reserve requirement. B) Sell bonds. C) Raise the discount rate. D) Buy bonds. Show Answer Correct Answer: D) Buy bonds. 12. A Federal deficit occurs when A) Exports exceed imports. B) Spending exceeds tax revenue. C) The dollar is weak internationally. D) MPC increases. Show Answer Correct Answer: B) Spending exceeds tax revenue. 13. How does a budget deficit impact the national debt? A) It helps it, making the deficit go up. B) It helps it, making the deficit go down. C) It hurts it, making the deficit go down. D) It hurts it, making the deficit go up. Show Answer Correct Answer: D) It hurts it, making the deficit go up. 14. What is the biggest risk to public officials when using contractionary policies? A) Inflation. B) No discretionary spending available. C) Infrastructure problems. D) Political pressure. Show Answer Correct Answer: D) Political pressure. 15. How does a budget surplus impact the national debt? A) It helps it, making the deficit go up. B) It helps it, making the deficit go down. C) It hurts it, making the deficit go down. D) It hurts it, making the deficit go up. Show Answer Correct Answer: B) It helps it, making the deficit go down. 16. When a tax has fixed price paid by all tax-payers it is a(an) ..... A) Excise Tax. B) Lump-Sum Tax. C) Payroll Tax. D) Federal Tax. Show Answer Correct Answer: B) Lump-Sum Tax. 17. ..... is a fed program that exists to aid older citizens, kids who've lost a parent, and disabled A) Medicare. B) Social Welfare. C) Medicaid. D) Social Security. Show Answer Correct Answer: D) Social Security. 18. Which monetary policy tool would speed up the economy? A) Increasing government spending. B) Decreasing interest paid on reserves. C) Increasing reserve requirement. D) Decreasing income taxes. Show Answer Correct Answer: B) Decreasing interest paid on reserves. 19. If the government spent $ 20 million, and the real GDP increased by $ 30 million, what is the marginal propensity to consumeFormula-1/(1-MPC) A) -3. B) -.5. C) -1.5. D) 3. Show Answer Correct Answer: B) -.5. 20. The current Governor of the SARB is A) Lesetja Kganyago. B) Pravin Gordhan. C) David van Rooyen. D) Nhlanhla Nene. Show Answer Correct Answer: A) Lesetja Kganyago. 21. Which monetary policy tool would increase the rate of AD growth? A) Decreasing the interest rate. B) Increasing reserve requirement. C) Increasing government spending. D) Increasing income taxes. Show Answer Correct Answer: A) Decreasing the interest rate. 22. If the economy was going into a recession, what would the Federal government do with taxes? A) Increase them. B) Do nothing. C) Decrease them. D) None of above. Show Answer Correct Answer: C) Decrease them. 23. If the Federal Reserve wanted to stimulate the economy (make it grow), they might A) Spend more money. B) Buy Treasury bonds. C) Spend less money. D) Sell Treasury bonds. Show Answer Correct Answer: B) Buy Treasury bonds. 24. ..... is a tax on the production or sale of a specific good or service A) Excise tax. B) User fee. C) Gift tax. D) Estate tax. Show Answer Correct Answer: A) Excise tax. 25. Which of the following scenarios would cause the nation's money supply to increase? A) Raising interest rates. B) Lowering interest rates. C) Decreasing government spending. D) Selling bonds to investors. Show Answer Correct Answer: B) Lowering interest rates. 26. Raising Taxes & Lowering Government spending to slow the economy is referred to as A) Monetary policy. B) Budget deficit. C) Budget surplus. D) Contractionary policy. Show Answer Correct Answer: D) Contractionary policy. 27. Fiscal Policy, is not always effective because (1 Crowding Out (2 Rational Expectations (3 Balanced Budget Amendments A) 1 only. B) 2 only. C) 2 and 3. D) 1 and 2. Show Answer Correct Answer: D) 1 and 2. 28. Macroeconomics is the study of? A) People. B) Decisions of individuals. C) The economy as a whole. D) None of above. Show Answer Correct Answer: C) The economy as a whole. 29. Which of the following is NOT a feature of a contractionary fiscal policy? A) Decreasing taxes. B) Decreasing spending. C) Decreasing aggregate demand. D) Increasing taxes. Show Answer Correct Answer: A) Decreasing taxes. 30. Refers to citizens responding to media reports, then contacting politicians and threatening/intimidating them into not carrying out a policy. A) Regulations. B) Political Pressure. C) Recession. D) Inflation. Show Answer Correct Answer: B) Political Pressure. ← 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