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WorksheetsMacroeconomics #2 Review
Total questions: 48
Worksheet time: 51mins
Bart is able to buy 50 water balloons with the $5 bill he received for his allowance. This is an example of money as
fiat money.
an investment.
a store of value.
a medium of exchange.
The Federal Reserve System controls the size of the
tax supply.
money supply.
demand supply.
production supply.
Which of these completes the chart?
Federal Reserve Chairman
Federal Open Market Committee
President of the United States
Senate and House of Representatives
The interest rate that banks must pay on money borrowed from Regional Federal Reserve Banks is the
discount rate.
inflation rate.
federal funds rate.
reserve requirement.
In early America, a traditional market structure existed when
merchants purchased goods from England.
farmers sold produce in markets in towns.
people bartered goods they produced for goods they needed.
people set up guilds to regulate specific industries, like masons.
Joe is an 18 year old high school student. If there is a sharp rise in interest rates, which situation BEST reflects how Joe's life might be impacted?
He might not be able to eat fast food as often.
He might have to purchase a less-expensive car.
He might not go out with his friends every Saturday.
He might need to make his clothes last a little longer.
Money is a "medium of exchange," meaning
it allows people to have jobs.
it tells us what things are worth.
it can be used to purchase goods and services.
it can be used to save for purchasing things at a later date.
One of the primary goals of stabilizing the economy is to
increase income levels.
maintain low unemployment.
raise the standard of living.
increase profits and spending.
Suppose the Fed decides to buy bonds and New Hampshire Colonial Bank decides to sell $10 million worth of bonds. What will New Hampshire Colonial Bank most likely be able to do?
Borrow more reserves from other banks.
Make new loans totaling about $10 million.
Reduce its outstanding loans by $10 million.
Borrow more reserves at the "discount window".
The economy is experiencing rapid inflation, pushing above 9%. which fiscal policy action should the government implement in an attempt to fix this problem?
Raise taxes
Increase spending
Decrease Interest Rates
Increase reserve requirements
Alberto is a carpenter. He needs a new saw in order to make more cabinets to sell to his buyers. To do this, he sells a bench he has made, and uses the money to purchase a new saw. What conclusion can you make using this example?
Alberto is using money as a store of value.
Alberto is suing money as a unit of account.
Alberto is using money as a medium of exchange.
Alberto is using money as a means of deferring payment.
Jen works as a teacher. At the end of each month she puts 20% of her paycheck in her savings account to use to purchase a new car. What conclusion can you make using this example?
Jen is using money as a store of value.
Jen is using money as a unit of account.
Jen is using money as a medium of exchange.
Jen is using money as a means of deferring payment.
The annual statement of outlays, tax revenues, and surplus and/or deficit of the United States government is called the _____.
federal spending
US deficit record
federal budget
federal spending plan
If the Federal Reserve decreases the rate on required and excess reserves, what would be the ideal outcome?
real GDP decreases and deflation occurs
real GDP rises and the unemployment rate increases
real GDP rises and the unemployment rate decreases
real GDP decreases and the unemployment rate decreases
Which statement does not describe a responsibility of the Reserve Banks?
They lend to depository institutions.
They supervise and examine state member banks.
They provide banking services, such as accounts, to individuals.
They provide key financial services such as distributing the nation's currency.
Something that efficiently functions as a medium of exchange, store of value, and unit of account, is considered ______.
money
barter
Government bonds
commodity futures
Suppose the government increases the amount of money it spends. This is an example of which of these?
using fiscal policy to decrease inflation
using fiscal policy to stimulate the economy
using monetary policy to stimulate the economy
using monetary policy to slow down the economy
Which of these will the government do to repay the national debt?
I Cut spending.
II Raise taxes.
III Increase interest rates.
IV Borrow more money.
III and IV only
I and II only
IV only
II only
By which actions are taken by the United States Federal Reserve in the implementation of monetary policy?
The United States Federal Reserve Board charges the interest rates charged at banks.
The United States Federal Reserve Board must approve all taxes and most expenditures of Congress.
The United States Federal Reserve Board selects the appointees to the Council of Economic Advisers (CEA).
The United States Federal Reserve Board regulates the amount of money that a member bank must keep in hand as reserves.
The United States Federal Reserve Board analyzes the economic forecast of the nation and leads the work of the President in constructing the yearly budget.
Choose all of the ways that the Federal Reserve fights recessions.
discount lending
open market purchases
raises interest rates
sells government securities
raises the reserve requirement for banks
The fact that a $10 bill received today will still be worth $10 100 years from now is an example of which function of money?
Store of value
Unit of account
Medium of exhange
Trading for things with other goods is called
money
stealing
bartering
negotiating
Who is responsible for making fiscal policy decisions?
The Federal Open Market Committee
The federal government's overall approach to spending and taxes is called
The Federal Open Market Committee
Fiscal Policy
The Federal Reserve
Monetary Policy
Which of the following would stimulate the economy? Choose all that apply!
Decrease taxes
Raise taxes
Government spends more on Science research
Government cuts organizations like the National Science Foundation
The headline below indicates which type of policy:
"Fed unleashes another big rate hike in bid to curb inflation"
Fiscal policy
Monetary policy
Monetary policy decisions are made by:
Congress
Senate
The Fed
President
Is a joint effort between the executive and legislative branches
fiscal policy
monetary policy
In order 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 policy
monetary policy
What can the government do to slow the economy in order to reduce inflation?
lower taxes
raise taxes
spend more
To help the economy grow, the government can
increase spending
decrease spending
lower the minimum wage
raise taxes
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
In order to help the economy grow, the FED may____________the reserve requirement, allowing banks to loan more people money so that they spend more
lower
raise
ignore
end
In order 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
The amount that all banks have to keep in the reserve and they can't loan out to people
monetary lending
fiscal spending
reserve requirement
lending policy
The interest rate the FED charges banks to borrow money will be lowered to help the economy grow and raised to slow the economy
reserve requirement
discount rate
bank rate
monetary bank
cause interest rates to decrease because low interest rates encourage business growth and expansion
cause interest rates to rise because high interest rates encourage business growth and expansion
increase the discount rate it charges banks, which would increase the money supply
increase consumer spending by reducing the money supply
