4.4 Fiscal Policy Quiz

What is the purpose of fiscal policy?

• To promote economic growth and stability

• To regulate the money supply

• To control inflation

• To manage the national debt

What is the main source of revenue for the federal government?

• Individual income tax

• Corporate income tax

• Excise tax

• Custom duties

What is the difference between mandatory spending and discretionary spending?

• Mandatory spending is authorized by law and does not require annual approval, while discretionary spending requires annual authorization

• Mandatory spending is for goods and services, while discretionary spending is for transfer payments

• Mandatory spending is counted in GDP, while discretionary spending is not

• Mandatory spending is used for fiscal policy, while discretionary spending is used for monetary policy

What is the purpose of contractionary fiscal policy?

• To combat inflation

• To stimulate economic growth

• To reduce unemployment

• To increase government spending

What is deficit spending?

• Annual spending in excess of taxes and other revenues

• Annual spending equal to taxes and other revenues

• Annual spending less than taxes and other revenues

• Annual spending without any taxes or revenues

What is the main goal of the Federal Reserve System?

• To regulate the money supply and promote economic stability

• To collect taxes and manage government spending

• To control inflation and reduce unemployment

• To manage the national debt and promote economic growth

What is the purpose of the Federal Reserve's monetary policy?

• To regulate the money supply and control inflation

• To promote economic growth and stability through government spending

• To manage the national debt and reduce unemployment

• To collect taxes and manage government spending

What is the main function of the Federal Reserve?

• To serve as the central bank of the United States

• To regulate the stock market

• To manage the national debt

• To collect taxes and manage government spending

What is the purpose of the power to tax?

• To provide for the common defense and general welfare

• To regulate the money supply

• To control inflation

• To manage the national debt

What is the main type of tax revenue for the federal government?

• Individual income tax

• Corporate income tax

• Excise tax

• Custom duties