Market Places Round 3

What is contractionary policy used for?

• To stimulate growth in the economy.

• To lower the unemployment rate.

• To discourage individuals from spending.

• All of the above

In order to implement expansionary policy, the government and Central Bank must ______ government spending, ______ taxes, and ______ interest rates.

• increase, increase, increase

• increase, decrease, decrease

• decrease, increase, increase

• decrease, decrease, decrease

In order to implement contractionary policy, the government and Central Bank must ______ government spending, _____ taxes, and ______ interest rates.

• increase, increase, increase

• increase, decrease, decrease

• decrease, increase, increase

• decrease, decrease, decrease

In order to implement expansionary policy, the Central Bank and government must _____ interest rates, ______ government spending, and _____ taxes.

• increase, increase, decrease

• increase, decrease, decrease

• decrease, increase, decrease

• decrease, decrease, increase

The state of the economy alone can predict how the financial market will perform.

• True

• False

When the economy is doing well, the financial market is also guaranteed to do well.

• True

• False

Even if the economy is declining, the financial market can still do well.

• True

• False

Which of the following behaviors are more likely to happen in a GOOD economy?

• Jordan takes out a loan to start a new business.

• Alexa takes her money out of the stock market and puts it in her savings account.

• Both Jordan and Alex

• Neither Jordan and Alex

Which of the following behaviors are more likely to happen in a GOOD economy?

• David invests his money in a new tech startup company.

• Galaxy Fitness, a locally-owned gym, takes out a loan to buy new equipment.

• Both David and Galaxy Fitness

• Neither A nor B

Which of the following behaviors are more likely to happen in a BAD economy?

• Fresh Mart, a local grocery store, had to lay off employees to keep costs down.

• Alicia takes her money out of her savings account and invests it in the stock market.

• Both Fresh Mart & Alicia

• Neither Fresh Mart & Alicia