WorksheetsEPF: Unit 2 Review
Total questions: 68
Worksheet time: 43mins
Who is in charge of Monetary Policy
The Government
The Federal Reserve System
The states
The Department of the Treasury
Monetary Policy is the Federal Reserve Systems attempt to...
control the amount of money in circulation
control the Federal Government's debt
control state governments' spending
none of these answers are correct.
Increasing the money supply too quickly > currency loses value > prices increase
money paid to the government through income, sales, and purchase of property
taxes
goods
scarcity
human resource
The ______ was created in 1913 to serve as America's central bank.
Federal Reserve System
Traditional Bank
First Citizens Bank
Raising the reserve requirement reduces the amount of _____________ and lowering it pumps more money into the economy.
money in circulation
taxes on corporations
sales tax
The Federal Reserve also sets the ______ banks charge to lend money to each other, which again controls the amount of money that circulates.
interest rate
loan exhange
salary cap
______ is a general rise in prices that can be caused by a number of things, but one of them is the amount of money that circulates.
inflation
deflation
foreclosure
__________ refers to the government's ability to raise taxes and spend the money it raises.
Fiscal Policy
Monetary Policy
Social Policy
Who controls fiscal policy?
The Federal Reserve
Congress & the President
The FBI
The Courts
During economic crisis, the primary role of the Federal Government is to promote a healthy economy by...
controlling the budget
setting spending levels
manipulating taxes and government spending
loaning out money
Which policy would help fight inflation?
Expansionary Policy
Contractionary Policy
A contractionary policy means that the Federal Government is attempting to
increase the nation's money supply
decrease the nation's money supply
An expansionary policy means that the Federal Government is attempting to
increase the nation's money supply
decrease the nation's money supply
Which policy would help fight unemployment?
Expansionary Policy
Contractionary Policy
During a recession, the Federal Government should use...
Expansionary Policy
Contractionary Policy
The Business Cycle measures ___ over time.
wealth
inflation
economic growth
The business cycle rises above the trendline during-
rescessions
expansions
troughs
GDP declines during a(an)
peak
contraction
expansion
Economic recovery begins-
above the trend line
at the end of a recession (trough)
at the "boom" period
GDP will begin to decline at-
the peak.
the trough.
the contractionary phase.
Which of the following is a peak?
A
B
C
D
Which of the following is a recession, or contraction?
A
B
C
D
Which of the following is a trough?
A
B
C
D
Which of the following is an expansion, or recovery?
A
B
C
D
GDP = C+I+G+(X-M)
GDP = C+I+G+(X-M)
GDP = C+I+G+(X-M)
Expectant parents buy supplies for the nursery. Would this be included in GDP?
Yes - Consumer Spending
Yes - Investment
No - Intermediate goods
No - Non-market activity
The trade in exotic animals being illegally sold as pets is a multi-billion-dollar-a-year industry. Is this included in GDP?
Yes - Consumer spending
Yes - Government Spending
No - Underground Economy
No - Non-market activity
_______ occurs when people are in between jobs, entering and reentering the labor force.
Cyclical unemployment
Technological unemployment
Frictional unemployment
Seasonal unemployment
Farm helpers are unemployed when the cropping season is over.
frictional
cyclical
structural
seasonal
When individuals lose jobs due to a decline in the economy (aggregate demand), often during an economic recession.
Structural Unemployment
Cyclical Unemployment
Frictional Unemployment
Seasonal Unemployment
Individuals are unemployed due to a lack in skills that modern industries need, change in technology.
Cyclical Unemployment
Frictional Unemployment
Structural Unemployment
Seasonal Unemployment
Sum of the employed and the unemployed
Employed
Unemployment
Labor Force
Unemployment Rate =
population / # of unemployed X 100
# of unemployed / # in the civilian labor force X 100
# in the civilian labor force / # of unemployed X 100
There are levels of unemployment. Someone who was looking for work but gave up trying is __
a high school dropout
discouraged worker
underemployed
a quitter
What is the definition for inflation?
The market value of all final goods and services produced in a nation during a period of time, usually a year.
The increase of general prices over time.
When people do not have jobs and are actively looking for one.
What is the definition for GDP?
The market value of all final goods and services produced in a nation during a period of time, usually a year.
The increase of general prices over time.
When people do not have jobs and are actively looking for one.
The use of government spending and tax policies to influence economic conditions
Monetary Policy
Economic Overhaul Policy
Fiscal Policy
Aggregate Demand Policy
Refers to the actions of central banks to achieve macroeconomic policy objectives such as price stability, full employment, and stable economic growth
a measurement of the total amount of demand for all finished goods and services produced in an economy
Gross National Product
Action by the government intending to create economic activity in the general public
demand
supply
Stimulus
monetary policy
Financial assistance given by the government to a business, industry, educational institution or individual considered to be for the general good of the public
Tax
Subsidy
Which of the following statements best characterizes the contraction period?
Increasing GDP, inflation, rising employment, new business
Highest GDP and employment, inflation, and most new business
Lowest GDP and employment, deflation, fewer businesses
Decreasing GDP, deflation, rising unemployment
How Americans live, together with the free time they have, as compared to other nations
Gross Domestic Product
Consumer Price Index
Livelihood
Standard of Living
Why is inflation a bad thing for the economy?
Prices decrease, increasing purchasing power
Prices increase, decreasing purchasing power
Prices decrease, increasing demand and supply
Prices increase, increasing demand and supply
How many districts are part of the Federal Reserve system?
9
10
11
12
For how long must CPI decrease for the economy to be in a "recession?"
6 months
7 months
8 months
9 months
Which of the following would MOST LIKELY happen during the expansion period?
Government would increase taxes and interest rates.
Government would increase spending, decrease interest rates.
Government would increase taxes and increase spending.
Government sells bonds and decrease reserve requirements.
Which FISCAL policies would government use during the contraction period?
Increase spending and decrease taxes.
Decrease spending and decrease taxes.
Decrease interest rates and the reserve requirement
Government would be laissez-faire and not interfere
What organization is the largest employer of workers in the United States?
Apple, Inc.
Federal Government
General Motors
Individual State Governments
What phases would? - The Fed decreases the Reserve requirement
Expansion/Peak
Contraction/Trough
What phases would? - The government decreases taxes
Expansion/Peak
Contraction/Trough
What phases would? - The Fed increases the Reserve requirement
Expansion/Peak
Contraction/Trough
What phases would? - The government decreases spending
Expansion/Peak
Contraction/Trough
What phases would? - The government increase taxes
Expansion/Peak
Contraction/Trough
The money that the government borrows and needs to pay back is called ________.
Expenditures
Income
National Debt
Exchange Rates
The government has to set one of these each year. It is a plan for how they will spend their money
Checkbook
Budget
Monetary Policy
Deficit
Other than taxes, how can US citizens fund the national budget?
Buying government bonds
Tax evasion
Writing a check
By taking advantage of banking programs
What is a budget deficit?
When the government goes over budget
When the government stays under budget
What is a budget surplus?
When the government goes over budget
When the government stays under budget
The United States national debt is
the amount of money owed by the federal government to United States citizens
the amount of money owed by the federal government to other United States government agencies
the amount of currency in the hands of foreigners
the amount of money owed by state and local governments to United States citizens
the amount of money owed to holders of United States government securities
A deficit is
when the government spends more than it collects in taxes and borrows to cover the difference.
the sum of all of the money owed by the government.
a very, very, very bad thing to have in government
okay to have.
Revenue means this:
Credit
Income
Taxes
Bankruptcy
