This quiz works best with JavaScript enabled. Home > Fiscal > Policy > Fiscal Policy – Quiz 7 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Fiscal Policy Quiz 7 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. There are ..... Federal Reserve Districts. A) 12. B) 25. C) 18. D) 7. Show Answer Correct Answer: A) 12. 2. What are two main monetary tools the government has? A) Government spending and reserve requirement. B) Taxes and government spending. C) Buy/selling bonds and discount rate. D) Discount rate and taxes. Show Answer Correct Answer: B) Taxes and government spending. 3. Which combination of fiscal and monetary policy would increase GDP growth? A) Increase taxes; decrease reserve requirement. B) Decrease taxes; decrease discount rate. C) Increase spending; increase interest on reserves. D) Decrease spending; sell bonds via open market operations. Show Answer Correct Answer: B) Decrease taxes; decrease discount rate. 4. In institution that accepts deposits and makes loans is defined as A) A bank. B) Insurance. C) Gambling. D) A loan shark. Show Answer Correct Answer: A) A bank. 5. If the economy is in an inflationary period, what action would Fiscal Policy most likely take? A) Decrease taxes. B) Decrease the discount rate. C) Increase taxes. D) Increase spending. Show Answer Correct Answer: C) Increase taxes. 6. Louis's dad pays a tax to the federal government each year based off the money he earns from his lawn mowing business. What type of tax does Louis's dad pay each year? A) Payroll Tax. B) Income Tax. C) Sales Tax. D) Property Tax. Show Answer Correct Answer: B) Income Tax. 7. On your paycheck stub, net income is ..... A) Not usually disclosed to you. B) The same as take-home pay. C) The total amount earned. D) The amount taken out of your paycheck. Show Answer Correct Answer: B) The same as take-home pay. 8. In which phase of the business cycle would the Federal Reserve implement Easy Money Policy? A) Expansion. B) Peak. C) Contraction. D) Trough. Show Answer Correct Answer: C) Contraction. 9. Fee charged by the Federal Reserve Bank for other member banks to borrow money from the FED through the discount window? A) Inflation. B) Interest. C) Discount rate. D) Reserve requirement. Show Answer Correct Answer: C) Discount rate. 10. If the economy is in a recession, the Fed should do what with the reserve requirement? A) Raise. B) Lower. C) All of the above ;). D) None of above. Show Answer Correct Answer: B) Lower. 11. Fiscal policy is actions taken by ..... to stabilize the economy. A) The federal Reserve. B) The Air force. C) The government. D) Wall street. Show Answer Correct Answer: C) The government. 12. Which does NOT describe a role of the Federal Reserve? A) Supplies the economy with currency. B) Supervises member banks. C) Controls the money supply. D) Determines whether to raise or lower taxes. Show Answer Correct Answer: D) Determines whether to raise or lower taxes. 13. The goal of monetary policy is to A) Sell bonds. B) Reduce unemployment. C) Prevent inflationary and recessionary economic periods. D) Increase tariffs on foreign countries. Show Answer Correct Answer: C) Prevent inflationary and recessionary economic periods. 14. Roman coins are an example of which characteristic of money? A) Durability. B) Uniformity. C) Acceptability. D) Divisibility. Show Answer Correct Answer: A) Durability. 15. When the government raises taxes, what does it take out of circulation? A) Money. B) Credit. C) People. D) Jobs. Show Answer Correct Answer: A) Money. 16. Banks and other financial institutions must keep a fraction of their deposits in the form of legal reserves A) Fractional Reserve Banking. B) Legal Reserves. C) Fiscal. D) Reserve system. Show Answer Correct Answer: A) Fractional Reserve Banking. 17. Expansionary monetary policy is sometimes called A) Circulation money policy. B) Easy money policy. C) Lending money policy. D) Money flow policy. Show Answer Correct Answer: B) Easy money policy. 18. Monetary Policy is used to regulate spending by increasing/decreasing A) Supply. B) Aggregate supply. C) Demand. D) Aggregate demand. Show Answer Correct Answer: D) Aggregate demand. 19. Policies involving decreased government spending and increased taxes to decrease the level of aggregate demand. A) Fiscal Policy. B) Monetary Policy. C) Expansionary Policy. D) Contractionary Policy. Show Answer Correct Answer: D) Contractionary Policy. 20. Franklin D. Roosevelt's New Deal, in which the government increased spending to create jobs, would be an example of A) Expansionary fiscal policy. B) Contractionary fiscal policy. C) Expansionary monetary policy. D) Contractionary monetary policy. Show Answer Correct Answer: A) Expansionary fiscal 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 8Fiscal Policy Quiz 9Fiscal Policy Quiz 10 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books