Free Printable Unit 6 Review

Worksheets

Unit 6 Review

Total questions: 25

Worksheet time: 11mins

Name

Class

Date

Money loses its value when it

It becomes too plentiful

becomes too portabale

is divisible

is durable

Which items on the graph are part of M1?

currency and savings deposits

currency, traveler’s checks plus demand deposits, and other checkable deposits

other checkable deposits, money market mutual funds, and small time deposits

currency, savings deposits, and small time deposits

In order for money to have value, it must have all of the following characteristics EXCEPT

portability.

durability.

divisibility.

plentiful availability.

If the Federal Reserve raises interest rates to combat rapid inflation, what might be a negative outcome?

Unemployment rates would rise

taxes will rise

The government would put a freeze on prices

international trade would stop

Which of the following is a monetary policy action used to combat a recession?

cutting taxes

increasing the money supply

decreasing the money supply

raising taxes

The Federal Reserve wants to reduce the nation's money supply. This could be accomplished by doing all of the following EXCEPT

decreasing the discount rate.

increasing the reserve requirement.

selling securities on the open market.

making banks hold a reserve for all types of deposits.

If the Federal Reserve System wanted to stimulate the U.S. economy and reduce unemployment, it would

A. cause interest rates to decrease because low interest rates encourage businessgrowth and expansion

B. cause interest rates to rise because high interest rates encourage business growthand expansion

C. increase the discount rate it charges banks, which would increase the money supply

D. increase consumer spending by reducing the money supply

If the Federal reserve and Government are attempting to encourage growth and stimulate the economy, which actions would each take?
(monetary / fiscal)

increase the Required reserve / increase government spending

sell government securities / decrease taxes

decrease the interest rate / increase government spending

buy government securities / decrease government spending

If the federal government is attempting to encourage spending by consumers and businesses, a fiscal policy BEST serving this purpose would be

decreasing taxes.

decreasing government spending.

reducing the investment tax credit.

balancing the budget.

10.

The rate the Fed charges banks for a loan

Discount rate

Federal fund rate

reserve ratio

prime rate

11.

Fiscal Policy is the

use of taxing and interest rates to influence the economy

use of money supply and interest rates to influence the economy

use of taxing and govt. spending to influence the economy

use of govt. spending and money supply to influence the economy

12.

The annual plan for spending by Congress and the President is

Federal Budget

Fiscal Policy

Money supply

recession

13.

Expansionary Monetary Policy involves increasing the money supply and govt. spending

True

False

14.

Contractionary Fiscal Policy involves

increase the money supply and increase interest rates

increasing govt. spending and decrease taxes

decrease interest rates decrease money supply

decrease govt. spending and increase taxes

15.

Increase in the national debt would be caused by

increasing govt. spending and increase taxes

increasing govt. spending and decrease taxes

decreasing govt. spending and increase taxes

increase interest rates and decrease the money supply

16.

During a period of recession the best action would be

increase the money supply and lower interest rates

decrease govt. spending and decrease taxes

decrease the money supply and increase govt. spending

increase interest rates and decrease the money supply

17.

Keynesian Economics believes that increased govt. spending will bring the economy out of recession

True

False

18.

The Great Depression helped prove Classical Economic theory

True

False

19.

Monetary Policy is implemented by

The Federal Budget

The Federal Reserve

Congress and the President

Taxing and govt. spending

20.

joint effort between the executive and legislative branches

fiscal

monetary

21.

to help the economy grow, the government will decrease or lower taxes. This allows people to have more money and buy more goods and services

fiscal

monetary

22.

the action by the FED to adjust the size of the money supply, and to adjust interest rates in order to keep prices down and employment high.

fiscal policy

monetary policy

23.

to slow the economy, the FED may____________ the reserve requirements and there will be less money to loan out to people.

increase

decrease

spend more

tax more

24.

the interest rate the FED charges banks, to borrow money. It will be lowered to help the economy grow and raised to slow the economy

reserve requirement

discount rate

bank rate

monetary bank

25.

How does the federal government borrow money?

asks members of congress to fork over some of their salaries

raises taxes

sells treasury bonds

asks people on welfare for food stamps

100 %

Unit 6 Review

Total questions: 25

Worksheet time: 11mins

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