Fiscal Policy Quiz 14 (20 MCQs)

Quiz Instructions

Select an option to see the correct answer instantly.

1. Public goods

Correct Answer: A) Ex of taxes.

2. Policies that are put in place to speed up the economy.

Correct Answer: C) Expansionary policies.

3. What is the most likely reason Contractionary Fiscal Policy, such as raising taxes, is not often implemented?

Correct Answer: B) It is unpopular to raise people's taxes.

4. Government policies to try and decrease the output of the economy in times of excessive inflation by increasing taxes or decreasing spending.

Correct Answer: C) Contractionary Fiscal Policy.

5. When the Federal Reserve Bank is using Open Market Operations, they are .....

Correct Answer: A) Buying or selling bonds.

6. A plan to increase the amount of money in circulation is called

Correct Answer: B) Expansionary monetary policy.

7. The Federal Reserve can increase the money supply by-

Correct Answer: D) Buying government bonds on the open market.

8. Who controls fiscal policy?

Correct Answer: B) The Federal Government.

9. Largest stimulus the US government has given out was known as the

Correct Answer: C) CARES Act (or the Coronavirus Aid, Relief, and Economic Security Act.).

10. Higher Income = Higher Taxes

Correct Answer: B) Progressive.

11. How does a budget deficit relate to the national debt?

Correct Answer: D) Budget deficits create the national debt.

12. Fiscal policy designed to stimulate business sector activity is called:

Correct Answer: B) Supply-side economics.

13. The function of money as a medium of exchange

Correct Answer: A) Facilitates transactions by serving as a means of payment.

14. The manipulation of the money supply in order to influence the cost and the availability of credit is

Correct Answer: C) Monetary Policy.

15. Government plans to spend exactly the same amount as its income

Correct Answer: C) Balanced Budget.

16. Which of the following IS NOT a monetary policy tool of the Federal Reserve?

Correct Answer: C) Decreasing government spending.

17. The formula used to calculate the amount a bank needs to keep on reserve at the Federal Reserve is known as

Correct Answer: C) Reserve requirement.

18. Decisions made by Congress & the White House that focused on the taxes and government spending.

Correct Answer: A) Fiscal policy.

19. ..... is a rate that a bank pays customers for keeping their money

Correct Answer: B) Interest.

20. Expansionary Fiscal Policy is usually characterized by:

Correct Answer: A) Deficit Spending.