First nine weeks review BMF 2

Which of the following is a result of loose money policy?

• People are willing to borrow money

• People are unwilling to borrow money

• Consumers hesitate to buy new homes

• Businesses postpone expansion

Which of the following is a result of a tight money policy?

• People are willing to borrow money

• Businesses cut back on production

• Consumers are willing to buy new homes

• Businesses expand

Why would a country want a tight money policy?

• To decrease the value of the dollar

• To encourage economic growth

• To control inflation

• To increase consumer spending

Fractional reserve banking makes it possible for banks to:

• Keep all deposits in reserve

• Keep no cash in vaults

• Use some deposits to make loans

• Process checks

The ability of banks to allow more than one individual to spend the same money is called:

• A loose money policy

• A tight money policy

• The multiple expansion of the money

• A monetary policy

Deficit financing is:

• A type of proportional tax

• A public assistance program

• Balanced budgeting

• Government spending

Programs aimed only at people who are poor or disabled are known as

• Social insurance programs

• Government programs

• Federally funded programs

• Public assistance programs

Property taxes, which are calculated as a percentage of the value of a home, are an example of

• The benefits-received principle

• A regressive tax

• The ability-to-pay principle

• A proportional tax

Since the end of World War II, the size of the U.S. government

• Has remained the same

• Has grown proportionally to the increase in the population

• Has grown much faster than the population

• Has not kept up with the increase in the population

Single parents in need of aid to raise their young children may qualify for

• Public goods

• Medicaid

• Social Security

• Temporary Assistance to Needy Families