This quiz works best with JavaScript enabled. Home > Fiscal > Policy > Fiscal Policy – Quiz 9 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Fiscal Policy Quiz 9 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Which of the following best defines "excise tax" ? A) Tax on donation of money or wealth. B) Tax on people's earnings. C) Tax on the manufacture or sale of certain items. D) Tax on the transfer of property when someone dies. Show Answer Correct Answer: C) Tax on the manufacture or sale of certain items. 2. What is national debt? A) All of the years of deficits combinded together. B) More taxes collected than spent. C) How much the government spends. D) What the president spends money on. Show Answer Correct Answer: A) All of the years of deficits combinded together. 3. Too much money in the economy results in ..... A) Inflation. B) Price reductions. C) Recessions. D) Deflation. Show Answer Correct Answer: A) Inflation. 4. Which of the following is not likely to happen when the money supply is increased A) Decrease in interest rates. B) Increased spending. C) Economic growth. D) Lowering of GDP. Show Answer Correct Answer: D) Lowering of GDP. 5. Keynesian theory suggests that government should A) Spend more than it taxes when saving exceeds investment. B) Maintain a balanced budget in order to stabilise the economy. C) Spend more than it taxes in order to improve welfare and social equity. D) None of above. Show Answer Correct Answer: A) Spend more than it taxes when saving exceeds investment. 6. Which type of unemployment is due to changes in the business cycle? A) Frictional. B) Seasonal. C) Structural. D) Cyclical. Show Answer Correct Answer: D) Cyclical. 7. The current chairman of the Federal Reserve is A) Barack Obama. B) Janet Yellen. C) Ben Bernanke. D) Alan Greenspan. Show Answer Correct Answer: B) Janet Yellen. 8. More revenue than expenditures. A) Surplus. B) Stagflation. C) Demand-pull. D) Deficit. Show Answer Correct Answer: A) Surplus. 9. Which of the these is a contractionary fiscal policy? A) Raising taxes. B) Increasing government spending. C) Cutting production of consumer good. D) Raising the discount rate. Show Answer Correct Answer: A) Raising taxes. 10. Expansionary Fiscal Policy usually creates government A) Surplus. B) Deficit. C) Calories. D) Degrees. Show Answer Correct Answer: B) Deficit. 11. Which of the following is not a tool of fiscal policy? A) Taxing. B) Spending. C) Interest Rates. D) All of these options are tools of fiscal policy. Show Answer Correct Answer: C) Interest Rates. 12. The main duty of the FOMC is ..... A) Setting monetary policy. B) Informing the president about the economy. C) Informing Congress about the economy. D) None of these. Show Answer Correct Answer: A) Setting monetary policy. 13. Subsidies are not used to ..... A) Encourage business growth in deprived areas. B) Encourage more sustainable business practices. C) Support innovative start-up businesses. D) Pay down government debt. Show Answer Correct Answer: D) Pay down government debt. 14. Increase in the national debt would be caused by A) Increasing govt. spending and increase taxes. B) Increasing govt. spending and decrease taxes. C) Decreasing govt. spending and increase taxes. D) Increase interest rates and decrease the money supply. Show Answer Correct Answer: B) Increasing govt. spending and decrease taxes. 15. Expansionary monetary policy does what? A) Increases the unemployment rates. B) Increases the number of jobs. C) Slows down economic growth. D) Helps to bring inflation down. Show Answer Correct Answer: B) Increases the number of jobs. 16. ..... is the accumulation of past budget deficits, minus past budget surpluses. A) Government Debt. B) Debt-GDP Ratio. C) Public Debt. D) Fiscal Year. Show Answer Correct Answer: A) Government Debt. 17. The Fed Board of Governors serve ..... terms. A) 4 year terms. B) 6 year terms. C) 14 year terms. D) Lifetime terms. Show Answer Correct Answer: C) 14 year terms. 18. When the business cycle is expanding too quickly, which of the following policies should be implemented by the Federal Government? A) Contractionary Monetary Policy. B) Contractionary Fiscal Policy. C) Expansionary Monetary Policy. D) Expansionary Fiscal Policy. Show Answer Correct Answer: B) Contractionary Fiscal Policy. 19. The interest rate the Fed charges other banks is known as the A) Prime rate. B) Mortgage rate. C) Operation rate. D) Discount rate. Show Answer Correct Answer: D) Discount rate. 20. Expansionary fiscal policies are laws aimed at reducing unemployment. How might Congress use expansionary fiscal policy? A) Decrease the discount rate. B) Increase taxes. C) Decrease government spending. D) Increase government spending and decrease taxes. Show Answer Correct Answer: D) Increase government spending and decrease taxes. ← 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 10 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books