Fiscal Policy Quiz 19 (20 MCQs)

Quiz Instructions

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1. The Board that supervises the sale and purchase of government subsidies is called the

Correct Answer: B) Federal Open Market Committee.

2. The government uses fiscal policy to try and achieve .....

Correct Answer: D) All of these.

3. A plan to increase aggregate demand and stimulate the economy by increasing the demand for money

Correct Answer: B) Expansionary Fiscal Policy.

4. Which of the following is NOT a goal of fiscal policy?

Correct Answer: A) Deficit Growth.

5. "Flat" Tax

Correct Answer: C) Proportional.

6. Under what circumstances might the government use contractionary fiscal policy?

Correct Answer: C) When it is trying to fight inflation.

7. The form used to report income and taxes owed to the government is called

Correct Answer: B) W2.

8. This is government spending implemented through an appropriations bill and is an optional part of fiscal policy,

Correct Answer: A) Discretionary Spending.

9. Which president's New Deal was the biggest fiscal policy spending programs in US History?

Correct Answer: B) Franklin Roosevelt.

10. The Federal Reserve does all of the following EXCEPT

Correct Answer: A) Raise taxes and determine government spending.

11. If the economy is in a recession, the Federal Reserve could do all of the following EXCEPT

Correct Answer: A) Lower taxes.

12. A government wishes to stimulate economic recovery. Which action will assist this?

Correct Answer: B) Decreasing income tax.

13. Which combination of fiscal and monetary policy would speed up the economy?

Correct Answer: B) Decrease taxes; decrease discount rate.

14. What is the purpose of Fiscal Policy?

Correct Answer: A) Contribute to economic growth and stability.

15. In which phase of the business cycle would the Federal Reserve implement Tight Money Policy?

Correct Answer: A) Expansion.

16. Lower discount rate, lower interest rates, lower reserve requirement

Correct Answer: D) Expansionary Monetary Policy.

17. This principle says that only those that use the good or service should pay the tax

Correct Answer: C) Benefits.

18. This seven member group supervises the banking system as part of the Federal Reserve System.

Correct Answer: B) Board of Governors.

19. The total of all deficit spending in U.S. history is known as the

Correct Answer: B) National debt.

20. Outside lag usually lasts

Correct Answer: D) Indeterminate.