This quiz works best with JavaScript enabled. Home > Fiscal > Policy > Fiscal Policy – Quiz 23 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Fiscal Policy Quiz 23 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. How does a budget deficit impact the national debt? A) It helps it, making the deficit go up. B) It helps it, making the deficit go down. C) It hurts it, making the deficit go up. D) It hurts it, making the deficit go down. Show Answer Correct Answer: C) It hurts it, making the deficit go up. 2. What is the biggest risk to public officials when using contractionary policies? A) Political pressure. B) Infrastructure problems. C) No discretionary spending available. D) Inflation. Show Answer Correct Answer: A) Political pressure. 3. How does a budget surplus impact the national debt? A) It helps it, making the deficit go up. B) It helps it, making the deficit go down. C) It hurts it, making the deficit go up. D) It hurts it, making the deficit go down. Show Answer Correct Answer: B) It helps it, making the deficit go down. 4. When a tax has fixed price paid by all tax-payers it is a(an) ..... A) Federal Tax. B) Excise Tax. C) Payroll Tax. D) Lump-Sum Tax. Show Answer Correct Answer: D) Lump-Sum Tax. 5. ..... is a fed program that exists to aid older citizens, kids who've lost a parent, and disabled A) Medicare. B) Medicaid. C) Social Welfare. D) Social Security. Show Answer Correct Answer: D) Social Security. 6. Which monetary policy tool would speed up the economy? A) Increasing reserve requirement. B) Decreasing income taxes. C) Increasing government spending. D) Decreasing interest paid on reserves. Show Answer Correct Answer: D) Decreasing interest paid on reserves. 7. If the government spent $ 20 million, and the real GDP increased by $ 30 million, what is the marginal propensity to consumeFormula-1/(1-MPC) A) -3. B) -.5. C) 3. D) -1.5. Show Answer Correct Answer: B) -.5. 8. The current Governor of the SARB is A) Lesetja Kganyago. B) Nhlanhla Nene. C) Pravin Gordhan. D) David van Rooyen. Show Answer Correct Answer: A) Lesetja Kganyago. 9. Which monetary policy tool would increase the rate of AD growth? A) Increasing reserve requirement. B) Increasing income taxes. C) Increasing government spending. D) Decreasing the interest rate. Show Answer Correct Answer: D) Decreasing the interest rate. 10. If the economy was going into a recession, what would the Federal government do with taxes? A) Increase them. B) Do nothing. C) Decrease them. D) None of above. Show Answer Correct Answer: C) Decrease them. 11. If the Federal Reserve wanted to stimulate the economy (make it grow), they might A) Sell Treasury bonds. B) Buy Treasury bonds. C) Spend more money. D) Spend less money. Show Answer Correct Answer: B) Buy Treasury bonds. 12. ..... is a tax on the production or sale of a specific good or service A) Estate tax. B) Gift tax. C) Excise tax. D) User fee. Show Answer Correct Answer: C) Excise tax. 13. Which of the following scenarios would cause the nation's money supply to increase? A) Decreasing government spending. B) Lowering interest rates. C) Raising interest rates. D) Selling bonds to investors. Show Answer Correct Answer: B) Lowering interest rates. 14. Raising Taxes & Lowering Government spending to slow the economy is referred to as A) Budget surplus. B) Monetary policy. C) Contractionary policy. D) Budget deficit. Show Answer Correct Answer: C) Contractionary policy. 15. Fiscal Policy, is not always effective because (1 Crowding Out (2 Rational Expectations (3 Balanced Budget Amendments A) 1 only. B) 2 only. C) 2 and 3. D) 1 and 2. Show Answer Correct Answer: D) 1 and 2. 16. Macroeconomics is the study of? A) People. B) Decisions of individuals. C) The economy as a whole. D) None of above. Show Answer Correct Answer: C) The economy as a whole. 17. Which of the following is NOT a feature of a contractionary fiscal policy? A) Decreasing taxes. B) Decreasing spending. C) Decreasing aggregate demand. D) Increasing taxes. Show Answer Correct Answer: A) Decreasing taxes. 18. Refers to citizens responding to media reports, then contacting politicians and threatening/intimidating them into not carrying out a policy. A) Political Pressure. B) Inflation. C) Recession. D) Regulations. Show Answer Correct Answer: A) Political Pressure. 19. During periods of inflation 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: C) Decrease . . . selling. 20. Unemployment rate has doubled, the FED should A) Lower taxes. B) Increase government spending. C) Buy bonds. D) Increase discount rate. Show Answer Correct Answer: C) Buy bonds. ← 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