Fiscal Policy Quiz 3 (20 MCQs)

Quiz Instructions

Select an option to see the correct answer instantly.

1. What is called when government spending is greater than the government revenue?

Correct Answer: D) Budget deficit.

2. The exchange of goods and services without using money is known as .....

Correct Answer: B) Bartering.

3. Expansionary fiscal policy includes all of the following EXCEPT .....

Correct Answer: A) Primting More Money.

4. The ..... curve illustrates the relationship between tax rates and total tax revenues.

Correct Answer: B) Laffer.

5. Spending that is subject to the appropriations process, where Congress sets a new funding level every year

Correct Answer: B) Discretionary spending.

6. The total amount of a good or service available in a particular market.

Correct Answer: D) Aggregate supply.

7. Which policy is the Fed likely to adopt during an expansion?

Correct Answer: A) Tight Money.

8. Keynes argued that recessions are due to a deficiency in:

Correct Answer: C) Consumption and Investment.

9. Who makes sure bank customers do not lose their money if a bank fails

Correct Answer: B) FDIC.

10. What was NOT a goal of the Federal Reserve?

Correct Answer: D) To give Congress and the president more influences over money issues.

11. Contractionary fiscal policy would most likely be used during .....

Correct Answer: C) Periods of sustained, demand pull inflation.

12. Which of the following is not a cause of the national deficit

Correct Answer: B) Taxes.

13. A rise in the cost of goods and services

Correct Answer: A) Inflation.

14. What are the top 3 expenditures for the gov

Correct Answer: A) Healthcare.

15. What means the government has spent more than it has raised

Correct Answer: C) Defecit.

16. Fixed expense

Correct Answer: A) Expenses you have already committed to spending.

17. This is a tax where you pay less the more money you make

Correct Answer: A) Regressive.

18. What is it called when government spending is less than government revenue?

Correct Answer: B) Budget surplus.

19. How could the Federal Reserve encourage banks to lend out more of their reserves?

Correct Answer: A) Reduce the discount rate.

20. A plan to reduce aggregate demand and slow the economy by raising taxes and decreasing government spending

Correct Answer: A) Contractionary Fiscal Policy.