This quiz works best with JavaScript enabled. Home > Fiscal > Policy > Fiscal Policy – Quiz 24 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Fiscal Policy Quiz 24 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Jake wants to purchase a video game for $ 10. Jake hands the cashier a $ 10 bill plus two $ 1 bills for tax. What tax is Jake paying? A) Payroll Tax. B) Income Tax. C) Sales Tax. D) Property Tax. Show Answer Correct Answer: C) Sales Tax. 2. The central bank in the USA that regulates the monetary system is known as A) The FED. B) FDIC. C) The IRS. D) Social Security. Show Answer Correct Answer: A) The FED. 3. Unlike Keynesian economics, this fiscal policy focuses on increasing aggregate supply to stimulate economic growth by giving businesses tax cuts and deregulation. A) Supply side economics. B) Discretionary spending. C) Contractionary fiscal policy. D) Demand pull inflation. Show Answer Correct Answer: A) Supply side economics. 4. When revenues exceed expenditures ..... A) There is a budget surplus. B) There is a budget deficit. C) The government must create more money. D) The government is forced to issue bonds. Show Answer Correct Answer: A) There is a budget surplus. 5. Who is the current Chairman of the Federal Reserve? A) Jerome Powell. B) Janet Yellen. C) Alan Greenspan. D) Paul Ryan. Show Answer Correct Answer: A) Jerome Powell. 6. The branch of the US Treasury in charge of taxes is the ..... A) CIA. B) FBI. C) DNA. D) IRS. Show Answer Correct Answer: D) IRS. 7. If GDP is decreasing and the unemployment rate is increasing, which fiscal policy would the government MOST likely use? A) Increase taxes. B) Decrease spending. C) Decrease taxes. D) Increase bank reserves. Show Answer Correct Answer: C) Decrease taxes. 8. Which economist favored government intervention in the economy? A) Glen Whitman. B) John Maynard Keynes. C) Adam Smith. D) Ben Stein. Show Answer Correct Answer: B) John Maynard Keynes. 9. A transfer payment is when the government A) Pays for trade with other countries. B) Buys something that get nothing in exchange for. C) Pays only for Medicare. D) Pays only for roads. Show Answer Correct Answer: B) Buys something that get nothing in exchange for. 10. The idea that a change in spending increases national income by greater than the amount of initial change is called A) The Lorenz Curve. B) The Laffer Curve. C) The Multiplier Effect. D) The Fiscal Effect. Show Answer Correct Answer: C) The Multiplier Effect. 11. Contractionary Policy will A) Increase G and Increase T. B) Increase G and Decrease T. C) Decrease G and Decrease T. D) Decrease G and Increase T. Show Answer Correct Answer: D) Decrease G and Increase T. 12. What is NOT a consequence of contractionary fiscal policy A) Aggregate demand shifts left. B) Price level increases. C) Unemployment increases. D) Output decreases. Show Answer Correct Answer: B) Price level increases. 13. The amount by which saving changes when disposable income changes A) Marginal propensity to save. B) Marginal propensity to consume. C) Expansionary fiscal policy. D) General savings. Show Answer Correct Answer: A) Marginal propensity to save. 14. To implement expansionary fiscal policy, the government is likely to A) Cut both taxes and spending. B) Increase both taxes and spending. C) Cut taxes and increase spending. D) Increase taxes and cut spending. Show Answer Correct Answer: C) Cut taxes and increase spending. 15. Lower Income = Higher Taxes A) Regressive. B) Progressive. C) Proportional. D) None of above. Show Answer Correct Answer: A) Regressive. 16. This government economic policy is set by the political branches of government. A) Fiscal Policy. B) Monetary Policy. C) The Reserve Requirement. D) Open Market Operations. Show Answer Correct Answer: A) Fiscal Policy. 17. Which is a key characteristic of an automatic stabilizer? A) They take time to be implemented. B) They occur automatically based on the phase of the business cycle we are in. C) They must be paid back to the government. D) Only corporations have access to automatic stabilizers. Show Answer Correct Answer: B) They occur automatically based on the phase of the business cycle we are in. 18. Contractionary fiscal policy are law aimed at reducing inflation. How might Congress use contractionary fiscal policy? A) Decrease government spending and increase taxes. B) Decrease taxes. C) Send stimulus checks to every person in the economy. D) Increase government spending. Show Answer Correct Answer: A) Decrease government spending and increase taxes. 19. The total demand for goods and services within a particular market. A) Aggregate supply. B) Inflation. C) Aggregate demand. D) Interest rates. Show Answer Correct Answer: C) Aggregate demand. 20. Policies involving increased government spending and reduced taxes to increase the level of aggregate demand. A) Fiscal Policies. B) Monetary Policies. C) Expansionary Policy. D) Contractionary Policy. Show Answer Correct Answer: C) Expansionary Policy. ← 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