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WorksheetsUnit 3b Test Review (SSEMA3)
Total questions: 110
Worksheet time: 2hrs 13mins
Name
Class
Date
1.
What is MOST LIKELY to happen to the economy if the Federal Reserve Bank increases the discount rate at the same time that Congress passes a law reducing government spending?
a)
A Uncertain, because the policies cancel each other.
b)
B Expansion, because both of the policies are expansionary.
c)
C Contraction, because both of the policies are contractionary.
d)
D Uncertain, because one is a fiscal policy and the other is a monetary policy.
2.
Which policy combination would work BEST to slow down an overheating, overproducing economy?
Fiscal Monetary
A Decrease taxes Sell Securities
B Increase Government spending Lower the discount rate
C Increase taxes Buy securities
D. Increase taxes Raise the discount rate
Fiscal Monetary
A Decrease taxes Sell Securities
B Increase Government spending Lower the discount rate
C Increase taxes Buy securities
D. Increase taxes Raise the discount rate
a)
A
b)
B
c)
C
d)
D
3.
45. If the Federal Reserve lowers the reserve requirement, Bobby as a consumer, will More LIKELY
a)
A. Buy a House
b)
B. Save his Money
c)
C. Buy Bonds
d)
D. Pay a high interest rate
4.
The government is said to have a balanced budget if
a)
A. The value of imports is equal to the value of exports
b)
B. Tax revenues are up from the previous year
c)
C. Government spending exactly equals the amount of government revenue
d)
D. Both the House of Representatives and the Senate agree on the budget
5.
You hear another student say: “Fiscal policy is easy to understand, all you have to know is what is happening with current tax rates!” This student is
a)
A correct, that is the definition of fiscal policy.
b)
B incorrect, he is describing monetary policy.
c)
C partially correct; he needs to include government spending decisions as well.
d)
D partially correct; he needs to include open market operations as well.
6.
The way the government conducts spending and taxation is called?
a)
A. Monetary Policy
b)
B. Economic Policy
c)
C. Free-Enterprise policy
d)
D. Fiscal Policy
7.
Fiscal policy is concerned with which of the following?
a)
A. Government spending and taxation
b)
B. Consumer spending and productivity
c)
C. Government spending and the money supply
d)
D. Taxation and inflation.
8.
A budget surplus means that
a)
A the Government has spent more money than it took in.
b)
B the Government has taken in more money than it spent.
c)
C the Government has spent more money than the Fed.
d)
D the Fed has spent more money than the government.
9.
National debt is different than government deficits in that
a)
A the debt only includes money owed for the current fiscal year.
b)
B deficits include all debts owed over time with interest.
c)
C deficits only apply to monetary decisions made by Congress
d)
D national debt is the sum of all past deficits plus interest
10.
If Inflation rates are sharply increasing, which fiscal policy would make the Most sense? (SSEMA3.b)
a)
A. reduce government spending
b)
B. reduce income taxes
c)
C. Reduce sale taxes
d)
D. reduce the discount rate
11.
Assume an economy is having high unemployment and low GDP. Which fiscal policy would be most appropriate?
a)
A decrease taxes
b)
B decrease the discount rate
c)
C decrease government spending
d)
D decrease the reserve requirement
12.
Why would a government enact a tight fiscal policy?
a)
A. To increase employment
b)
B. To help businesses expand and hire more people
c)
C. To increase the amount of money in the economy
d)
D. To lower inflation and improve government finances
13.
When the government consistently runs budget _____, they add to the _____.
Which pair of words completes this sentence in order?
Which pair of words completes this sentence in order?
a)
A surpluses, debt
b)
B debts, deficit
c)
C taxes, spending
d)
D deficits, debt
14.
Which of the following is NOT an indicator of economic growth?
a)
GDP
b)
Aggregate Demand
c)
Unemployment Rate
d)
inflation
15.
Macroeconomics is the study of?
a)
People
b)
Decisions of individuals
c)
The economy as a whole
16.
How many Federal Reserve District banks are there?
a)
12
b)
9
c)
6
d)
5
17.
__________ is the total value amount of goods and service produced within a country's border in a one year time period?
a)
economic output
b)
Gross domestic product
c)
aggregate supply
d)
aggregate demand
18.
Which type of GDP accounts for inflation?
a)
Nominal GDP
b)
Real GDP
19.
_____ is a rate that a bank pays customers for keeping their money
a)
collateral
b)
interest
c)
currency
d)
deposit
20.
amount of deposits that banks are required to keep on hand
a)
monetary policy
b)
money creation
c)
reserve requirements
d)
prime rate
21.
If the United States is experiencing inflation, the Fed will likely
a)
Increase the supply of money in the economy
b)
Decrease the supply of money in the economy
22.
How many Board of Governor members are there?
a)
3
b)
5
c)
7
d)
12
23.
Which part of the Fed decides when to raise or lower interest rates?
a)
Board of Governors
b)
Advisory Committee
c)
Chairman
d)
Federal Open Market Committee
24.
interest rate that the Federal Reserve charges commercial banks for loans
a)
discount rate
b)
monetary policy
c)
inside lag
d)
tight money policy
25.
buying and selling of government securities in order to alter the supply of money
a)
open market operations
b)
tight money policy
c)
outside lag
d)
inside lag
26.
Which of the following would cause the Federal Reserve to implement expansionary monetary policy?
a)
The economy is expanding too quickly and inflation is a concern.
b)
The federal government passes a new budget with a large deficit.
c)
The economy is prosperous with low inflation.
d)
A recession has reduced aggregate demand and increased unemployment.
27.
When interest rates rise, the number of loans made by banks will
a)
increase
b)
decrease
c)
be unaffected
28.
If the economy is in a recession, the Federal Reserve could do all of the following EXCEPT
a)
Lower taxes
b)
Lower the discount rate
c)
Buy securities
d)
Lower the required reserve ratio
29.
The federal government's overall approach to spending and taxes is called
a)
Physical Policy
b)
Fiscal Policy
c)
Money
d)
Monetary Policy
30.
An example of expansionary fiscal policy would be
a)
cutting taxes.
b)
cutting government spending.
c)
cutting production of consumer goods.
d)
cutting prices of consumer goods.
31.
When we need to slow economic growth, we need
a)
Expansionary Fiscal and Monetary Policy
b)
Contractionary Fiscal and Monetary Policy
32.
If the unemployment rate is rising and GDP is falling, the fiscal policy action that the federal government should MOST likely follow is
a)
decreasing taxes.
b)
decreasing spending.
c)
decreasing the money supply.
d)
decreasing the reserve requirement.
33.
Which of the following are responsible for making fiscal policy decision?
a)
The President and Congress
b)
The Federal Reserve System
c)
The National Council of Economic Advisors
d)
The commerce Department
34.
A deficit budget is one where
a)
government revenue is less than government spending
b)
government revenue exceeds government revenue
c)
spending on imports exceeds export earnings
d)
spending on imports is less than export earnings.
35.
If the federal government is attempting to encourage spending by consumers and businesses, a fiscal policy BEST serving this purpose would be
a)
decreasing taxes.
b)
decreasing government spending.
c)
reducing the investment tax credit.
d)
balancing the budget.
36.
What is the Fed and the gov't concerned about if the economy is expanding?
a)
inflation
b)
low GDP output
c)
full employment
d)
high unemployment
37.
If the economy was going into a recession, what would the Federal government do with taxes?
a)
increase them
b)
do nothing
c)
decrease them
38.
Choose the 2 answers below that are fiscal policy tools of the Federal Government
a)
Local referendums
b)
Taxes
c)
Discount Rate
d)
Government Spending
39.
Which of the following statements is true about Debt?
a)
Debt is the amount of money you have in your checking account.
b)
Debt is the amount of money you have borrowed from a person or a business.
c)
Debt is the ability to borrow money.
d)
Debt is the amount of money you have in a savings account.
40.
When a budget's spending that is greater than it's revenue?
a)
balanced
b)
suplus
c)
deficit
41.
The yearly plan for how the US Government will spend the money it takes from taxes and borrowing
a)
federal budget
b)
the task
c)
discretionary spending
d)
mandatory spending
42.
Accumulation of deficits year after year is called
a)
entitlements
b)
debt
c)
mandatory spending
d)
discretionary spending
43.
If you have a budget surplus, you do not have debt.
a)
True
b)
False
44.
Which of the following is not a tool of fiscal policy?
a)
Taxing
b)
Spending
c)
Interest Rates
45.
Monetary policy most closely relates to.
a)
A the economies imports and exports
b)
B the money supply and interest rates
c)
. C production possibilities curves.
d)
D taxing and spending of Congress.
46.
What should the Fed do with open market operations if they want to correct an economy that is sluggish and in a trough of the business cycle?
a)
A Buy treasury securities
b)
B Sell treasury securities
c)
Raise the discount rate
d)
D Lower the discount rate
47.
When the Fed buys bonds, which combination of economic measurement do they expect?
Price Level Real GDP Unemployment
A increase increase decrease
B increase increase increase
C decrease decrease decrease
D decrease decrease increase
a)
a
b)
b
c)
c
d)
d
48.
What Effect does a “tight money” policy have on the reserve requirement and the economy’s money supply?
a)
A. It raises the reserve requirement, thereby increasing the money supply.
b)
B. It lowers the reserve requirement, thereby decreasing the money supply
c)
C. It raises the reserve requirement, thereby decreasing the money supply
d)
D. It lowers the reserve requirement, thereby increasing the money supply
49.
Which of the following is NOT a store of value?
a)
A. Money
b)
B. Gold
c)
C. Gems
d)
D. Food
50.
People use money to buy things and pay debts because they have agreed upon the money’s worth. This function of money is called what?
a)
A. Medium of Exchange
b)
B. Standers of Value
c)
C. Units of account
d)
D. Store of Value
51.
The central bank of the United States set policies designed to control the money supply is called the
a)
A. Congressional Bank
b)
B. Bank of the United States of America
c)
C. Federal Reserve
d)
D. Bank of US Governors
52.
How many functions of money are there?
a)
1
b)
2
c)
3
d)
4
53.
The Federal Reserve is described by all of the following statements, EXCEPT:
a)
Individual’s Bank
b)
Banker’s Bank
c)
Central Bank
d)
Government’s Bank
54.
The American Dollar bill is an example of
a)
Commodity Currency
b)
Representative Currency
c)
Fiat Currency
d)
Public Currency
55.
The Federal Reserve
a)
is made up of 12 district banks and 25 branch banks.
b)
is managed by a 12-member board of directors.
c)
is made up of district banks that operate independently from one another.
56.
It allows us to place a monetary value on goods and services
a)
Means of exchange
b)
Unit of Account
c)
Store of Value
d)
Legal Tender
57.
It allows us to trade
a)
Means of exchange
b)
Unit of Account
c)
Store of Value
d)
Legal Tender
58.
A unit of account allows us to place a .................... value on goods and ................
a)
estimated/products
b)
monetary/services
c)
certain/products
d)
monetary/products
59.
Identify this coin
a)
Dime
b)
Quarter
c)
Nickel
d)
Penny
60.
Which of these is NOT a monetary policy tool?
a)
Discount rate
b)
Balance Accounts
c)
Open Market Operation
d)
Reserved Requirements
61.
High reserve requirements
a)
lower the money supply
b)
increase the money supply
62.
Low reserve requirements
a)
lower the money supply
b)
increase the money supply
63.
"The Fed" refers to the....
a)
Federal Bureau of Investigation
b)
Federal Government
c)
Federal Reserve System
d)
Federal Income Tax
64.
What happens to the money circulation, when the FED orders a tight money policy?
a)
more money is put out into circulation
b)
less money is put into circulation
c)
circulation stays the same
d)
interest rates rise
65.
Which of the following scenarios would cause the nation’s money supply to increase?
a)
Decreasing government spending
b)
Lowering interest rates
c)
Raising interest rates
d)
Selling bonds to investors
66.
What function of money the picture represent?
a)
Medium of Exchange
b)
Store of Value
c)
Unit of Account
d)
Acceptable
67.
What function of money the picture represents?
a)
Medium of Exchange
b)
Store of Value
c)
Unit of Account
d)
Durable
68.
What function of money the picture represents?
a)
Medium of Exchange
b)
Store of Value
c)
Unit of Account
d)
Stable
69.
Last year, you sold your game system to your friend Jimmy for $125 in cash. You've been saving that money in a shoe box under your bed. You are saving the money to buy a new computer next year. What is the primary function of money exhibited here?
a)
Medium of Exchange
b)
Store of Value
c)
Unit of Account
d)
Stable
70.
At the grocery store last week, you purchased $94.25 worth of groceries. You paid for the groceries in cash. You gave the cashier four $20 bills, a $10 bill, three $1 bills, and a quarter. What is the primary function of money exhibited here?
a)
Medium of Exchange
b)
Store of Value
c)
Unit of Account
d)
Acceptable
71.
At the grocery store last week, you had to decide whether to buy the 14.5 oz can of diced tomatoes for $1.75 or the 28 oz. can of diced tomatoes for $2.44. What is the primary function of money exhibited here?
a)
Medium of Exchange
b)
Store of Value
c)
Unit of Account
d)
Divisible
72.
What characteristic of money the picture represents?
a)
Scarce
b)
Divisible
c)
Stable
d)
Durable
73.
Bob is shopping at the mall and goes to the checkout counter to pay for his shoes. What function of money is Bob engaging in?
a)
Medium of Exchange
b)
Portability
c)
Divisibility
d)
Store of Value
74.
The fact that money can be stored or saved, must keep its value, and must be non-perishable describes what function of money?
a)
Acceptability
b)
Unit of Measure
c)
Medium of Exchange
d)
Store of Value
75.
The concept of time value of money means...
a)
Money must be divisible
b)
Money must be easy to transport
c)
Money does not lose its value over time
d)
Money must be acceptable as a medium of exchange
76.
Which is NOT a characteristic of money?
a)
Stable
b)
Portable
c)
Acceptance
d)
Plentiful
77.
Fake money is called _____.
a)
counterfeit
b)
tender
c)
metallic
d)
linen
78.
The Lowest point in the business cycle
a)
Peak
b)
Trough
c)
Expansion
d)
Contraction
79.
The HIGHEST Point in business cycle
a)
Peak
b)
Trough
c)
Contraction
d)
Recession
80.
What term is used to describe an increase in the general price level?
a)
Deflation
b)
Monetary policy
c)
Stagnation
d)
Inflation
81.
What is the formula for GDP?
a)
C + I + G + (X-M)
b)
C + I + G / (X-M)
c)
C + I + G + (population)
d)
C + I + G + (M-X)
82.
Which phase of the Business Cycle includes the economy slowing down?
a)
Prosperity
b)
Recession
c)
Depression
d)
Recovery
83.
Which type of unemployment do lifeguards experience?
a)
Seasonal
b)
Structural/Technological
c)
Cyclical
d)
Frictional
84.
When a company buys new computers for their business, what part of the GDP equation does this count as?
a)
Consumption
b)
Investments
c)
Imports
d)
Exports
85.
What type of unemployment do recent college graduates experience while looking for a job?
a)
Seasonal
b)
Structural/Technological
c)
Cyclical
d)
Frictional
86.
What type of unemployment did people experience during the Great Depression?
a)
Seasonal
b)
Structural/Technological
c)
Cyclical
d)
Frictional
87.
Who is most likely to be hurt by inflation?
a)
someone who borrowed money
b)
a retiree on a fixed income
c)
a business owner
d)
the U.S. government
88.
What is inflation?
a)
rise in all prices
b)
rise in most prices
c)
rise in some prices
d)
rise in general prices
89.
Increasing unemployment and decreasing GDP is a sign of what part of the Business Cycle?
a)
Expansion
b)
Peak
c)
Contraction
d)
Hot Cheetos
90.
If GDP falls for at least 2 Quarters, it is called.
a)
Expansion
b)
Recession
c)
Clumsy
d)
Frictional
91.
What term is used to describe the percent of the labor force that does not have a job but is currently looking for one?
a)
Leading economic indicator
b)
Full employment
c)
Unemployment rate
d)
Structural unemployment
92.
Which is NOT included in Gross Domestic Product (GDP) as a measure of the economy?
a)
Final goods and services
b)
Work done at home such as house renovations
c)
Dollars
d)
Government spending
93.
Which best describes GDP?
a)
Monetary value of all final goods and services produced within a country’s borders in a year
b)
Personal income and expenses each day
c)
It is a cycle of things and stuff
d)
Products shipped from one country to another for purchase
94.
Which would most likely occur during a period of recession?
a)
Cost-push inflation occurs
b)
Unemployment rate falls
c)
Production increase
d)
Real gross domestic output falls
95.
Fee charged by the Federal Reserve Bank for other member banks to borrow money from the FED through the discount window?
a)
inflation
b)
interest
c)
discount rate
d)
reserve requirement
96.
"The Fed" refers to the....
a)
Federal Bureau of Investigation
b)
Federal Government
c)
Federal Reserve System/Bank
d)
Federal Income Tax
97.
Does increasing the money supply cause inflation or deflation?
a)
Inflation
b)
Deflation
98.
number of federal reserve district banks?
a)
5
b)
10
c)
12
d)
21
99.
Which of the following are responsible for making fiscal policy decision?
a)
The President and Congress
b)
The Federal Reserve System
c)
The National Council of Economic Advisors
d)
The commerce Department
100.
The federal government's overall approach to spending and taxes is called
a)
Physical Policy
b)
Fiscal Policy
c)
вежба
d)
Monetary Policy
101.
What are the two names of Mrs. Lucier's dogs? (PICK TWO).
a)
Lily
b)
Piper
c)
Spot
d)
Shadow
102.
When the federal government uses its spending and revenue to influence the economy
a)
Fiscal Policy
b)
Monetary Policy
c)
Keynesian Policy
d)
Supply Side Policy
103.
Which of the following is NOT a goal of fiscal policy?
a)
Deficit Growth
b)
Economic Growth
c)
Full Employment
d)
Stable Prices
104.
Which of the following is NOT a feature of a contractionary fiscal policy?
a)
Decreasing taxes
b)
Decreasing spending
c)
Decreasing aggregate demand
d)
Increasing taxes
105.
Which fiscal policy is the government likely to adopt during a contraction?
a)
Expansionary
b)
Contractionary
c)
Easy Money
d)
Tight Money
106.
Which of the following is NOT a feature of expansionary fiscal policy?
a)
Decrease aggregate demand
b)
Increase government spending
c)
Cut taxes
d)
Decrease unemployment
107.
This amount is the sum of all money the government has borrowed
a)
National Debt
b)
Budget Deficit
c)
Budget Surplus
d)
Tight Money
108.
Which of the following is NOT a way the Fed influences the money supply?
a)
Decreasing taxes
b)
Changing the reserve ratio
c)
Influencing interest rates
d)
Buying or selling government securities
109.
Cutting or decreasing which of the following would be an example of expansionary fiscal policy?
a)
income taxes
b)
government spending
c)
production of consumer goods
d)
workers' wages
110.
What typically happens to consumer & business spending when interest rates go up?
a)
both types of spending increase.
b)
Consumer spending increases & business spending decreases.
c)
Both types of spending decrease.
d)
Business spending increases & consumer spending decreases
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