This quiz works best with JavaScript enabled. Home > Fiscal > Policy > Fiscal Policy – Quiz 11 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Fiscal Policy Quiz 11 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Which answer below is something that the FED does NOT do? A) Buy/sell bonds. B) Increase/decrease discount rate/fed funds rate. C) Increase/decrease income tax rates. D) Increase/decrease reserve requirement. Show Answer Correct Answer: C) Increase/decrease income tax rates. 2. Which best describes "expansionary fiscal policy" ? A) Increasing government spending and lowering taxes. B) Decreasing government spending and increasing taxes. C) Increasing government spending and increasing taxes. D) Decreasing government spending and lowering taxes. Show Answer Correct Answer: A) Increasing government spending and lowering taxes. 3. How much money must the bank keep on hand if the required reserve is 20% and there is a deposit of R1 000? A) 20. B) 50. C) 200. D) 1020. Show Answer Correct Answer: C) 200. 4. What is surplus? A) Having an excess of money. B) Having a limited amount of money. C) Having a balanced amount of money. D) Having a credit line. Show Answer Correct Answer: A) Having an excess of money. 5. What would the political branches of government do to spending during a period of high inflation? A) Raise it. B) Lower it. C) Keep it the same. D) Does not have the ability to change it. Show Answer Correct Answer: B) Lower it. 6. A deficit budget is one where A) Government revenue is less than government spending. B) Government revenue exceeds government revenue. C) Spending on imports exceeds export earnings. D) Spending on imports is less than export earnings. Show Answer Correct Answer: A) Government revenue is less than government spending. 7. The MPC is .75. Congress increase government spending by $ 100 billion and increases taxes by $ 100 billion. The GDP A) Increases by $ 800 billion. B) Decreases by $ 800 billion. C) Remains the same. D) Increases by $ 100 billion. Show Answer Correct Answer: D) Increases by $ 100 billion. 8. Kacie puts money in a savings account so she will have future purchasing power. Which function is money serving here? A) Medium of exchange. B) Unit of account. C) Standard of value. D) Store of value. Show Answer Correct Answer: D) Store of value. 9. Refers to government revenue, spending, and debt A) Fractional Reserve Banking. B) Legal Reserves. C) Fiscal. D) Reserve system. Show Answer Correct Answer: C) Fiscal. 10. The impact lag for fiscal policy is A) Shorter than for monetary policy. B) Longer than for monetary policy. C) About the same as for monetary policy. D) Long and indeterminate. Show Answer Correct Answer: A) Shorter than for monetary policy. 11. Which best describes "contractionary fiscal policy" ? A) Increasing government spending and lowering taxes. B) Decreasing government spending and increasing taxes. C) Increasing government spending and increasing taxes. D) Decreasing government spending and lowering taxes. Show Answer Correct Answer: B) Decreasing government spending and increasing taxes. 12. The amount of money the US government borrows to fund the national budget is the annual ..... A) Deficit. B) Debt. C) Revenue. D) Receipt. Show Answer Correct Answer: A) Deficit. 13. Contractionary fiscal policy would be implemented during a (n) ..... order to ..... the money supply and make money more ..... A) Inflationary Period; Decrease; Valuable. B) Recessionary Period; Increase; Available. C) Government Shut-Down; Increase; Valuable. D) None of above. Show Answer Correct Answer: A) Inflationary Period; Decrease; Valuable. 14. During a recession the Fed will ..... the money supply by ..... government securities. A) Decrease . . . buying. B) Increase . . . buying. C) Decrease . . . selling. D) Increase . . . selling. Show Answer Correct Answer: B) Increase . . . buying. 15. Which of the following would be an expansionary monetary policy (increase in economic growth)? A) Raising wages of prison staff. B) Raising interest rates. C) Lowering interest rates. D) Lowering government spending. Show Answer Correct Answer: C) Lowering interest rates. 16. Which monetary policy tool would be expansionary? A) Decrease reserve requirement. B) Increase discount rate. C) Increase interest paid on reserves. D) Selling bonds via open market operations. Show Answer Correct Answer: A) Decrease reserve requirement. 17. Central bank of the U.S. that oversees monetary policy A) Federal Reserve. B) Internal Revenue Service. C) Central Intelligence Agency. D) Federal Bureau of Investigations. Show Answer Correct Answer: A) Federal Reserve. 18. What is the most likely reason Contractionary Fiscal Policy is not often implemented? A) It takes too long to work. B) It is unpopular to raise people's taxes. C) It works too quickly. D) It leads to increases in the national debt. Show Answer Correct Answer: B) It is unpopular to raise people's taxes. 19. Which is NOT one of government's role in the economy? A) Protecting property rights. B) Maintaining competition. C) Protecting consumers, savers, and investors. D) Protecting monopolistic corporations. Show Answer Correct Answer: D) Protecting monopolistic corporations. 20. Fiscal Policy is the A) Use of taxing and interest rates to influence the economy. B) Use of money supply and interest rates to influence the economy. C) Use of taxing and govt. spending to influence the economy. D) Use of govt. spending and money supply to influence the economy. Show Answer Correct Answer: C) Use of taxing and govt. spending to influence the economy. ← PreviousNext →Related QuizzesFiscal QuizzesFiscal Policy Quiz 1Fiscal Policy Quiz 2Fiscal Policy Quiz 3Fiscal Policy Quiz 4Fiscal Policy Quiz 5Fiscal Policy Quiz 6Fiscal Policy Quiz 7Fiscal Policy Quiz 8Fiscal Policy Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books