Economic Policy-HSA Practice

If government statistics show rising unemployment and a falling Consumer Price Index, which of these actions should the Federal Reserve take to help the economy?

• increase government spending

• decrease interest rates

• increase the reserve requirements for banks

• decrease tariffs placed on imported products

Which of these is a goal of the United States government in stabilizing the economy?

• to increase the national debt

• to decrease the unemployment rate

• to increase the Consumer Price Index (CPI)

• to decrease the Gross Domestic Product (GDP)

Based on the chart, which of these would be a result of open market operations by the Federal Reserve System?

• interest rates on loans decrease

• new types of currency are created

• the operating hours of banks change

• the size of the money supply changes

Which of these is an example of government fiscal policy?

• creating budgets

• adjusting the discount rate

• conducting open-market operations

• changing the reserve requirement

Which of these is a characteristic of an economic downturn (recession)?

• increased employment levels

• increased consumer spending

• decreased government regulations

• decreased production of goods and services.

Study the political cartoon. What rates are being cut as shown in the political cartoon?

• Tariff

• Interest

• Personal income tax

• Corporate income tax

Student the graph. Which of these best characterizes the condition of the economy between 1975 and 1978?

• A rapidly rising unemployment rate

• Increased economic growth

• A constant inflation rate

• Steady interest rates

Which of these is a responsibility of the Federal Reserve System?

• collecting taxes

• lending money to individuals

• controlling the money supply

• approving budgets

Which of these economic indicators would be most useful for determining the rate of inflation?

• the prime interest rate

• the unemployment rate

• The Consumer Price Index (CPI)

• Gross Domestic Product

Which of these is an economic benefit of the government providing unemployment payments to people who have lost their jobs?

• Tax rates decline.

• Consumer spending levels remain stable.

• Job opportunities for younger workers increase.

• Businesses have fewer people to choose from when hiring new employees.