SSEMA3 (Review Test)

The government is said to have a balanced budget if 

•  A. The value of imports is equal to the value of exports
•  B. Tax revenues are up from the previous year 
• C. Government spending exactly equals the amount of government revenue
• D. Both the House of Representatives and the Senate agree on the budget

   You hear another student say: “Fiscal policy is easy to understand, all you have to know is what is happening with current tax rates!”  This student is

• A  correct, that is the definition of fiscal policy.
• B  incorrect, he is describing monetary policy.
• C  partially correct; he needs to include government spending decisions as well.
•  D partially correct; he needs to include open market operations as well.

Which is NOT a goal promoted by the government through fiscal policy?

• Price stability
• Economic growth
• Full employment
• Inflation

A Government decision to increase taxes is MOST related to which combination of events?
    Consumption    Aggregate Demand    GDP
A        decrease               decrease     decrease
B         decrease            increase        decrease
C           increase            increase         increase
D            decrease           decrease       increase

• A
• B
• C
• D

What can one assume from the following headline: “President and Congress Feud Over Fiscal Policy”? 

• A. The President and Congress cannot agree on a tax plan and/or a budget 
• B. The President Favors higher taxes, but Congress opposed them 
• C. Congress and the President cannot agree on defense spending
•  D. Congress and the president cannot agree on interest rates

 Congress approves a budget that allocates how much money will be spent on defense, education, social programs, and so on. Their plan also calls for an increase in taxes to help pay for all the expanses. This plan defines what? 

• A. The government’s monetary policy
• B. The government’s fiscal policy 
•  C. The government’s revenue
•   D. The government’s reserve requirement

The way the government conducts spending and taxation is called?

• A. Monetary Policy 
• B. Economic Policy 
• C. Free-Enterprise policy 
• D. Fiscal Policy

Fiscal policy is concerned with which of the following?

•  A. Government spending and taxation 
• B. Consumer spending and productivity
•  C. Government spending and the money supply 
•  D. Taxation and inflation. 

A budget surplus means that  

• A  the Government has spent more money than it took in. 
• B  the Government has taken in more money than it spent.
• C  the Government has spent more money than the Fed. 
• D  the Fed has spent more money than the government.

National debt is different than government deficits in that

• A      the debt only includes money owed for the current fiscal year.
• B       deficits include all debts owed over time with interest.
• C      deficits only apply to monetary decisions made by Congress
• D      national debt is the sum of all past deficits plus interest