Fiscal Policy Quiz 25 (20 MCQs)

Quiz Instructions

Select an option to see the correct answer instantly.

1. All spending that does NOT take place through the appropriations legislation. (fixed spending)

Correct Answer: D) Mandatory spending.

2. Contractionary fiscal policy includes all of the following EXCEPT .....

Correct Answer: A) Physically Destroying Money.

3. The rate the South African Reserve Bank charges banks for a loan

Correct Answer: A) Repo rate.

4. A budget deficit means that

Correct Answer: A) The Government spent more money than it collected in taxes.

5. Contractionary Fiscal Policy involves

Correct Answer: D) Decrease govt. spending and increase taxes.

6. A recession would cause what type of move on the Phillips Curve?

Correct Answer: C) Movement down the SRPC.

7. If the government wants to stimulate(speed up) the economy the Federal Reserve will

Correct Answer: A) Lower the discount rate.

8. Which of the following is an example of "supply-side" economics?

Correct Answer: D) Reduced government regulation.

9. A tax on imports is called?

Correct Answer: A) Tariff.

10. The federal budget is the instrument by which the government implements

Correct Answer: B) Fiscal policy.

11. If the economy was going into a recession, what might Congress do?

Correct Answer: C) Increase government spending.

12. The FOMC targets the federal funds rate using this tool

Correct Answer: C) Open market operations.

13. ..... is a tax on the assets of a person who has died

Correct Answer: A) Estate tax.

14. Which is an example of an automatic stabilizer

Correct Answer: C) Progressive tax scheme.

15. If you pay a 6% sales tax on new clothing, this tax is an example of a

Correct Answer: A) Regressive tax.

16. Fiscal policy can be used to create a healthier balance of payments by:

Correct Answer: C) Decreasing government spending and increasing tax.

17. What is the relationship between deficit and debt?

Correct Answer: B) Budget deficits lead to higher debt.

18. Which of these is an example of government expenditure?

Correct Answer: A) Social Security and Benefits.

19. The federal income tax is this category of tax, where your effective rate increases as your income increases.

Correct Answer: A) Progressive.

20. The largest source of federal government revenue (what they bring in) is .....

Correct Answer: C) Personal income taxes.