Business Cycle and Monetary Policy Quiz

Considering stage 3 in the business cycle, the Federal Reserve would attempt to correct the economy by choosing to

• Spending less money on assistance programs

• Increasing the Discount Rate

• Buy back bonds from consumers

• Increase Reserve Rate

Tags

EPF.E.2

If an economist believes that the government should lower taxes for the wealthy and business owners and let the money "trickle down" that economist believes in:

• Keynesian Economics

• Supply Side Economics

• Laissez-Faire

• Demand Side Economics

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EPF.E.2

If the Federal Reserve increases the reserve requirement of American banks

• Loans will be harder to obtain, therefore inspiring saving and conservative spending

• Government spending will be increased as the President has sole discretion over how that money is utilized

• Citizens will see a decrease in the interest rates of their mortgages, credit cards, and personal loans

• Loans will remain unaffected, as local banks operate separately from the Federal Reserve

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EPF.E.2

EPF.E.2.1

EPF.E.2.2

EPF.E.2.3

EPF.E.2.4

Which of the following IS NOT a tool of Monetary Policy?

• Raising or lowering interest rates

• Government Spending for domestic and international programs

• Raising or lowering reserve requirement banks must maintain

• Buying and selling bonds

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EPF.E.2

Unemployment rates have increased 4% and real-GDP has fallen for six months and counting. This would be indicated above at stage

• 1

• 2

• 3

• 4

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EPF.E.2

McKenzie has been let go at her job at Coldstone Creamery because the demand for ice cream has decreased dramatically. This would be indicated at stage and represents this type of unemployment:

• 1; Frictional

• 2; Structural

• 2; Cyclical

• 3; Structural

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EPF.E.2

During phase 2, the Federal Government (the President and Congress) would choose to implement which type of policy?

• Tight Fiscal

• Loose Monetary

• Loose Fiscal

• Tight Monetary

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EPF.E.2

The purpose of tight fiscal policy is to

• Control inflation and reduce both consumer and government spending

• Promote more aggressive American Economy in the International Market

• Control inflation and increase both consumer and government spending

• I got the bag, I ain't showin' my hand
  I take your girl and put her in a Lamb'
  I got the Aston Martin liftin' up (skrrt)
  And I got that plate of money runnin' up
  Ain't one diamond, two diamond
  I'm doubled, they flooded up

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EPF.E.2

The Federal Reserve has increased the reserve requirements and interest rates while pushing for bonds to be sold. This would indicate a Monetary Policy and indicated at stage above.

• Tight Fiscal Policy; 4

• Loose Monetary Policy; 3

• Loose Fiscal Policy; 2

• Tight Monetary Policy; 1

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EPF.E.2

Who of the following would be considered seasonally unemployed?

• A hand model for Rolex

• A snowboard instructor for Vail, Colorado

• A pharmacist for Walgreens

• A waitress at Chilis

Tags

EPF.E.2

EPF.E.2.1

EPF.E.2.2

EPF.E.2.3

EPF.E.2.4