This quiz works best with JavaScript enabled. Home > Fiscal > Policy > Fiscal Policy – Quiz 16 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Fiscal Policy Quiz 16 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Which is an example of proportional tax? A) Death tax. B) Sales tax. C) Federal income tax. D) Corporate income tax. Show Answer Correct Answer: B) Sales tax. 2. This is the yearly plan for how the US Government will spend the money it takes from taxes and borrowing A) Federal budget. B) The task. C) Discretionary spending. D) Mandatory spending. Show Answer Correct Answer: A) Federal budget. 3. If the U.S. economy moves into recession due to a decline in consumer confidence, which of the following do we not expect? A) The U.S. dollar will depreciate. B) The U.S. interest rate will fall. C) GDP in other countries will expand. D) None of above. Show Answer Correct Answer: C) GDP in other countries will expand. 4. The interest rate the Fed charges banks for loans is called A) Contractionary policy. B) Discount rate. C) Required reserve ratio. D) Monetary policy. Show Answer Correct Answer: B) Discount rate. 5. A direct tax is ..... A) A tax on income or wealth. B) A tax on goods and services. C) A tax paid by consumers. D) A tax paid by producers. Show Answer Correct Answer: A) A tax on income or wealth. 6. When the economy goes into a recession and the fiscal policy stimulates aggregate demand without policy makers making any deliberate action. What is an ..... A) Laissez faire. B) Contractionary fiscal policy. C) Economic stabilizer. D) Automatic stabilizer. Show Answer Correct Answer: D) Automatic stabilizer. 7. Cutting or decreasing which of the following would be an example of expansionary fiscal policy? A) Income taxes. B) Government spending. C) Production of consumer goods. D) Workers' wages. Show Answer Correct Answer: A) Income taxes. 8. Houston is in the ..... district A) San Antonio. B) Dallas. C) Houston. D) El Paso. Show Answer Correct Answer: B) Dallas. 9. What are the 2 basic tools the federal government uses to influence the economy A) Entitlements and spending. B) Entitlements and wages. C) Taxation and spending. D) Taxation and wages. Show Answer Correct Answer: C) Taxation and spending. 10. How many districts make up the regional component of the Federal Reserve? A) 12. B) 7. C) 9. D) 13. Show Answer Correct Answer: A) 12. 11. If the inflation rate is rising too fast, which fiscal policy would make the MOST sense? A) Decrease bank reserves. B) Increase spending. C) Decrease taxes. D) Increase taxes. Show Answer Correct Answer: D) Increase taxes. 12. In the product market, firms are willing to accept money as payment for their goods and services. In this example, money serves as A) A store of value. B) A medium of exchange. C) A unit of account. D) A standard of value. Show Answer Correct Answer: B) A medium of exchange. 13. Amount of deposits that banks are required to keep on hand A) Monetary policy. B) Money creation. C) Reserve requirements. D) Prime rate. Show Answer Correct Answer: C) Reserve requirements. 14. ..... is the largest category of mandatory spending, and ..... is the largest category of discretionary spending. A) Defense / social security. B) Medicare / defense. C) Medicaid / social decurity. D) Social security / defense. Show Answer Correct Answer: D) Social security / defense. 15. The expanding number of markets that countries must trade with to maintain their standard of living A) Domestic jobs. B) Tariffs. C) Trade advantage. D) Globalization. Show Answer Correct Answer: D) Globalization. 16. The expansion or contraction of the money supply in order to influence the cost and the availability of credit is A) Monetary Policy. B) Fiscal Policy. C) Contractionary Policy. D) Expansionary Policy. Show Answer Correct Answer: A) Monetary Policy. 17. How does the Federal Reserve regulate the US monetary policy? A) Adjusting the long-term interest rates. B) Adjusting the short-term interest rates. C) Adjusting long-term taxes. D) Adjusting short-term taxes. Show Answer Correct Answer: B) Adjusting the short-term interest rates. 18. If the government takes in more than it spends it is known as A) Balanced budget. B) Budget surplus. C) Discretionary budget. D) Budget deficit. Show Answer Correct Answer: B) Budget surplus. 19. The general increase of price levels? A) Inflation. B) Deflation. C) Consumer price index. D) Aggregate demand. Show Answer Correct Answer: A) Inflation. 20. What is the tax multiplier formula A) MPC/-MPS. B) MPS x-MPC. C) -MPC/MPS. D) MPC-(MPS/2). Show Answer Correct Answer: C) -MPC/MPS. ← 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