This quiz works best with JavaScript enabled. Home > Economics > Fiscal > Policy > Fiscal Policy – Quiz 4 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Fiscal Policy Quiz 4 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Which would be least appropriate for expansionary fiscal policy A) Increase taxes. B) Decrease taxes. C) Increase government spending. D) Combination of decreasing taxes and increasing spending. Show Answer Correct Answer: A) Increase taxes. 2. The purpose of fiscal policy is to ..... A) Stabilize the economy. B) Increase economic efficiency. C) Increase the money supply. D) Increase economic growth only. Show Answer Correct Answer: A) Stabilize the economy. 3. Which of the following would the FED us to increase the money supply? A) Raise the required reserves. B) Buy bonds/securities. C) Print more money. D) Raise the discount rate. Show Answer Correct Answer: B) Buy bonds/securities. 4. What is expansionary fiscal policy designed to do? A) Slow GDP growth. B) Increase GDP (output). C) Reduce employment. D) Prevent hyperinflation. Show Answer Correct Answer: B) Increase GDP (output). 5. The government would implement a expansionary fiscal policy during ..... in order to give people ..... A) A Recession; More Money to Spend. B) A Recovery; More Money to Spend. C) Government Shut Down; The Money They Lost While Out of Work. D) None of above. Show Answer Correct Answer: A) A Recession; More Money to Spend. 6. Voting members of the FOMC include 7 members of the ..... and Presidents of the 12 district banks. A) Board of Governors. B) President's Council. C) Financial Institution League. D) Senate. Show Answer Correct Answer: A) Board of Governors. 7. Lara compares the prices of two boxes of candy. Money is serving as A) A medium of exchange. B) A store of value. C) A unit of account. D) None of above. Show Answer Correct Answer: C) A unit of account. 8. The Bank of England sells government bonds. What type of policy is this? A) Contractionary Fiscal. B) Contractionary Monetary. C) Expansionary Monetary. D) Expansionary Fiscal. Show Answer Correct Answer: B) Contractionary Monetary. 9. Expansionary Policy will A) Increase G and INcrease T. B) Increase G and Decrease T. C) Decrease G and Decrease T. D) Decrease G and Increase T. Show Answer Correct Answer: B) Increase G and Decrease T. 10. Money enables people to save. This function is called A) Store of value. B) Means of differed payment. C) Unit of account. D) Medium of exchange. Show Answer Correct Answer: A) Store of value. 11. The top of the organizational chart of the Federal Reserve System is the ..... A) Mayor of Washington D.C. B) Chairperson. C) President of the US. D) Head of the largest bank in the country. Show Answer Correct Answer: B) Chairperson. 12. What is the definition of a budget surplus? A) When tax revenue is greater than government spending. B) When government spending is greater than tax revenue. C) The source of finance for government spending. D) A tax on spending, on goods/services. Show Answer Correct Answer: A) When tax revenue is greater than government spending. 13. On your paycheck stub, gross income is ..... A) Not usually disclosed to you. B) The same as take-home pay. C) The total amount earned. D) The amount taken out of your paycheck for taxes. Show Answer Correct Answer: C) The total amount earned. 14. Deadline to file taxes is A) January 1st. B) April 5th. C) April 15th. D) May 15th. Show Answer Correct Answer: C) April 15th. 15. Spending that is an optional part of fiscal policy, in contrast to entitlement programs for which funding is mandatory. A) Supply. B) Aggregate Supply. C) Discretionary Spending. D) Entitlement Spending. Show Answer Correct Answer: C) Discretionary Spending. 16. Which of these is NOT a monetary policy tool? A) Discount rate. B) Reserved Requirements. C) Balance Accounts. D) Open Market Operation. Show Answer Correct Answer: C) Balance Accounts. 17. If inflation is 5% and GDP is up 4.5%, what should the FED do? A) Buy bonds. B) Lower the reserve requirement. C) Raise income taxes. D) Sell securities. Show Answer Correct Answer: D) Sell securities. 18. In response to a rising Consumer Price Index, the Federal Reserve could A) Raise taxes. B) Sell securities on the open market. C) Lower government spending. D) Lower the discount rate. Show Answer Correct Answer: B) Sell securities on the open market. 19. When income increases, the tax rate increases is an example of ..... A) Sales taxes. B) Progressive taxes. C) Excise taxes. D) Regressive taxes. Show Answer Correct Answer: B) Progressive taxes. 20. Who had a big influence on Fiscal Policy? A) John Maynard Keynes. B) Thomas Malthus. C) Josh Allen. D) Adam Smith. Show Answer Correct Answer: A) John Maynard Keynes. 21. New federal spending that has not been determined by past legislative or executive commitments is ..... A) Automatic fiscal spending. B) Discretionary fiscal spending. C) Uncontrollable fiscal spending. D) Automatic stabilizers. Show Answer Correct Answer: B) Discretionary fiscal spending. 22. When the federal government uses its spending and revenue to influence the economy A) Supply Side Policy. B) Fiscal Policy. C) Keynesian Policy. D) Monetary Policy. Show Answer Correct Answer: B) Fiscal Policy. 23. ..... is the price paid for the use of money. A) The interest rate. B) Fiscal policy. C) Monetary policy. D) Gold. Show Answer Correct Answer: A) The interest rate. 24. " ..... Officials decided to announce they would keep interest rates near zero until the unemployment rate drops to 6.5%." A) Monetary Policy. B) Fiscal Policy. C) Both Monetary and Fiscal Policy. D) None of above. Show Answer Correct Answer: A) Monetary Policy. 25. Which is most likely to increase during a downturn A) Government spending on health care. B) Consumer spending on non-durable goods. C) Firm's inventories or stocks. D) None of above. Show Answer Correct Answer: C) Firm's inventories or stocks. 26. A budget deficit is when ..... A) Spending is greater than revenue. B) Spending is less than revenue. C) Revenue is greater than spending. D) The budget has been incorrectly calculated. Show Answer Correct Answer: A) Spending is greater than revenue. 27. Monetary policies the Federal Reserve can adopt include all of the following EXCEPT A) Buying government bonds. B) Raising personal income tax rates. C) Lowering the reserve requirement. D) Raising the discount rate. Show Answer Correct Answer: B) Raising personal income tax rates. 28. Inflation is measured by ..... A) Gross National Product (GNP). B) Gross Domestic Product (GDP). C) Consumer Price Index (CPI). D) Securities & Exchange Commission (SEC). Show Answer Correct Answer: C) Consumer Price Index (CPI). 29. There are ..... Federal Reserve Districts. A) 25. B) 7. C) 12. D) 18. Show Answer Correct Answer: C) 12. 30. What are two main monetary tools the government has? A) Government spending and reserve requirement. B) Taxes and government spending. C) Buy/selling bonds and discount rate. D) Discount rate and taxes. Show Answer Correct Answer: B) Taxes and government spending. ← PreviousNext →Related QuizzesFiscal QuizzesEconomics QuizzesFiscal Policy Quiz 1Fiscal Policy Quiz 2Fiscal Policy Quiz 3Fiscal Policy Quiz 5Fiscal Policy Quiz 6Fiscal Policy Quiz 7Fiscal Policy Quiz 8Fiscal Policy Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books