Spring Semester Economics Final Exam: Study Guide

What is the primary role of the Federal Reserve in the U.S. economy?

• To regulate fiscal policy

• To manage monetary policy

• To control government spending

• To oversee international trade

Which of the following is NOT a tool used by the Federal Reserve to implement monetary policy?

• Open market operations

• Discount rate

• Reserve requirements

• Taxation

What type of tax is the U.S. income tax, where higher earners pay a higher percentage?

• Regressive tax

• Proportional tax

• Progressive tax

• Sales tax

Which economic indicator measures the total economic output of a country?

• Unemployment rate

• Inflation rate

• Gross Domestic Product (GDP)

• Consumer Price Index (CPI)

What happens to wages when the demand for workers exceeds the supply?

• Wages tend to fall

• Wages tend to rise

• Wages remain constant

• Wages fluctuate randomly

Which of the following is an example of expansionary fiscal policy?

• Increasing taxes

• Decreasing government spending

• Increasing government spending

• Raising interest rates

What is the term for when the government spends more than it collects in revenue?

• Budget surplus

• Budget deficit

• National debt

• Fiscal equilibrium

Which government agency regulates the stock market?

• Federal Trade Commission (FTC)

• Securities and Exchange Commission (SEC)

• Environmental Protection Agency (EPA)

• Federal Reserve System (Fed)

What is the purpose of antitrust laws?

• To protect consumers

• To promote fair competition

• To ensure worker safety

• To prevent environmental harm

Which type of tax is a sales tax, where lower-income individuals pay a higher proportion?

• Progressive tax

• Proportional tax

• Regressive tax

• Income tax