This quiz works best with JavaScript enabled. Home > Fiscal > Policy > Fiscal Policy – Quiz 5 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Fiscal Policy Quiz 5 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. The largest category of spending for the federal government is ..... A) Interest on the federal debt. B) The military. C) Entitlement programs such as Social Security and Medicare. D) Education. Show Answer Correct Answer: C) Entitlement programs such as Social Security and Medicare. 2. Using government spending to increase aggregate demand most of the time is an example of A) Supply-side fiscal policy. B) Demand-side fiscal policy. C) Automatic stabilizers. D) Discretionary fiscal policy. Show Answer Correct Answer: B) Demand-side fiscal policy. 3. Which policies counteract (go against) each other A) Increasing taxes and selling bonds. B) Increasing government spending and selling bonds. C) Decreasing taxes and decreasing reserve requirement. D) Decreasing government spending and increasing the reserve requirement. Show Answer Correct Answer: B) Increasing government spending and selling bonds. 4. What would be the most likely reason for the government to enact contractionary fiscal policy ..... to slow down economic growth? A) To lower the unemployment rate. B) To slow down inflation (rising prices). C) To increase imports. D) None of above. Show Answer Correct Answer: B) To slow down inflation (rising prices). 5. In the United States, fiscal policy is made by A) Executive order from the President. B) A process involving different branches of government. C) Central planners working for Congress. D) The actions of consumers and producers in the market. Show Answer Correct Answer: B) A process involving different branches of government. 6. Higher interest rates, increase in the reserve requirement and higher taxes are all examples of A) Monetary Policy. B) Fiscal Policy. C) Contractionary Policy. D) Expansionary Policy. Show Answer Correct Answer: C) Contractionary Policy. 7. During economic crisis, the primary role of the Federal Government is to promote a healthy economy by ..... A) Controlling the budget. B) Setting spending levels. C) Manipulating taxes and government spending. D) Loaning out money. Show Answer Correct Answer: C) Manipulating taxes and government spending. 8. The Federal Reserve System is commonly called ..... A) The "tax collector". B) The "Fed". C) The "big bank". D) The "big apple". Show Answer Correct Answer: B) The "Fed". 9. The Board of Governors consists of A) 9 members who supervise the Fed. B) 8 members who supervise the Fed. C) 7 members who supervise the Fed. D) 6 members who supervise the Fed. Show Answer Correct Answer: C) 7 members who supervise the Fed. 10. Number of federal reserve district banks? A) 5. B) 10. C) 12. D) 21. Show Answer Correct Answer: C) 12. 11. Fiscal policy is defined as: A) The use of government taxing and spending to promote economic stability. B) The policy of laissez-faire. C) A set of government actions designed to increase unemployment over 5%. D) The use of government quotas to decrease GDP and unemployment. Show Answer Correct Answer: A) The use of government taxing and spending to promote economic stability. 12. What do taxes collected under FICA fund? A) Medicaid. B) Defense Spending. C) Social Security and Medicare. D) SNAP and Medicaid. Show Answer Correct Answer: C) Social Security and Medicare. 13. Which would be least appropriate for expansionary fiscal policy A) Increase taxes. B) Decrease taxes. C) Increase government spending. D) Combination of decreasing taxes and increasing spending. Show Answer Correct Answer: A) Increase taxes. 14. The purpose of fiscal policy is to ..... A) Increase the money supply. B) Increase economic efficiency. C) Stabilize the economy. D) Increase economic growth only. Show Answer Correct Answer: C) Stabilize the economy. 15. Which of the following would the FED us to increase the money supply? A) Raise the discount rate. B) Raise the required reserves. C) Buy bonds/securities. D) Print more money. Show Answer Correct Answer: C) Buy bonds/securities. 16. What is expansionary fiscal policy designed to do? A) Increase GDP (output). B) Prevent hyperinflation. C) Slow GDP growth. D) Reduce employment. Show Answer Correct Answer: A) Increase GDP (output). 17. The government would implement a expansionary fiscal policy during ..... in order to give people ..... A) A Recession; More Money to Spend. B) A Recovery; More Money to Spend. C) Government Shut Down; The Money They Lost While Out of Work. D) None of above. Show Answer Correct Answer: A) A Recession; More Money to Spend. 18. Voting members of the FOMC include 7 members of the ..... and Presidents of the 12 district banks. A) Board of Governors. B) Senate. C) Financial Institution League. D) President's Council. Show Answer Correct Answer: A) Board of Governors. 19. Lara compares the prices of two boxes of candy. Money is serving as A) A medium of exchange. B) A store of value. C) A unit of account. D) None of above. Show Answer Correct Answer: C) A unit of account. 20. The Bank of England sells government bonds. What type of policy is this? A) Contractionary Fiscal. B) Expansionary Fiscal. C) Contractionary Monetary. D) Expansionary Monetary. Show Answer Correct Answer: C) Contractionary Monetary. ← PreviousNext →Related QuizzesFiscal QuizzesFiscal Policy Quiz 1Fiscal Policy Quiz 2Fiscal Policy Quiz 3Fiscal Policy Quiz 4Fiscal Policy Quiz 6Fiscal Policy Quiz 7Fiscal Policy Quiz 8Fiscal Policy Quiz 9Fiscal Policy Quiz 10 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books