Government Economic Policy Part 2

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 the following actions would increase the money supply?

• The Federal Reserve increases the prime interest rate.

• Congress reduces the federal income tax rate.

• The Federal Reserve lowers the reserve requirement.

• Congress increases the minimum wage.

Which of the following are responsible for making fiscal policy decision? 

• The President and Congress
• The Federal Reserve System
• The National Council of Economic Advisors
• The commerce Department

An example of expansionary fiscal policy would be

• cutting taxes.
• cutting government spending.
• cutting production of consumer goods.
• cutting prices of consumer goods.

The Federal government is concerned that economic growth is too high, that it is unsustainable, and that inflation is resulting. Which of the following fiscal policies  might be enacted to reduce inflation?

• Increasing taxation
• Open market sales
• decreasing taxation
• Increasing government spending

Which of the following is not a tool of fiscal policy?

• Taxing
• Spending
• Interest Rates
• All of these options are tools of fiscal policy.

What type of policy is the use of interest rates to control the economy?

• demand side policy
• fiscal policy
• insurance policy
• monetary policy

Fee charged by the Federal Reserve Bank for other member banks to borrow money from the FED through the discount window?

• inflation

• interest

• discount rate

• reserve requirement

The goal of monetary policy is to

• sell bonds

• reduce unemployment

• prevent inflationary and recessionary economic periods

• increase tariffs on foreign countries

"The Fed" refers to the....

• Federal Bureau of Investigation

• Federal Government

• Federal Reserve System/Bank

• Federal Income Tax