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WorksheetsIntroduction to MP and FP
Total questions: 20
Worksheet time: 19mins
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.
A tax that is the same "percentage" for everyone is called a _________ ?
flat tax
progressive tax
proportional tax
regressive
If the business cycle were in a trough what could the Federal Reserve do to help it to come out?
Lower the Reserve Rate
Raise the Reserve Rate
Raise Taxes
Lower Taxes
To reduce interest rates on loans and stimulate the economy, the Fed could_________? Choose two
Raise the Discount Rate
Raise the Reserve Rate
Lower the Reserve Rate
Buy Bonds
If the business cycle was showing itself to be coming out of a trough all the following could be done to expand the economy except what?
Lower the discount rate.
Lower the reserve rate.
Raise taxes.
Buy bonds
Government Spending
Which of the following are the right approaches used by Central Bank to influence money supply?
Required Reserved Ratio
Discount Rate
Open-Market Operations
Taxation
If Central Bank lower the required reserve ratio, it would
limit money supply
increase money supply
money supply remain unchanged
During inflationary period, central bank will use
expansionary monetary policy
contractionary monetary policy
supply side policy
Business will invest more if
the interest rate on loan is low
the interest rate on loan is high
expected returns on investment is high
expected returns on investment is low
The goal of monetary policy is to
sell bonds
reduce unemployment
prevent inflationary and recessionary economic periods
increase tariffs on foreign countries
Which of the following is NOT a feature of a contractionary fiscal policy?
Decreasing taxes
Decreasing spending
Decreasing aggregate demand
Increasing taxes
Which of the following is NOT a feature of expansionary fiscal policy?
Decrease aggregate demand
Increase government spending
Cut taxes
Decrease unemployment
Which of the following is NOT a way the Fed influences the money supply?
Decreasing taxes
Changing the reserve ratio
Influencing interest rates
Buying or selling government securities
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 of the following statements is true?
Contractionary monetary policy would increase government revenue & slow down the economy.
Contractionary fiscal policy would decrease the reserve requirement & slow down the economy.
Contractionary fiscal policy would lead to an increase in the national debt.
Contractionary monetary never works
Which is an example of automatic stabilizer?
Stimulus checks that congress had to vote on
A paycheck from your employer
Unemployment Insurance
Interest on your savings account
Which is a key characteristic of an automatic stabilizer?
They take time to be implemented
They occur automatically based on the phase of the business cycle we are in.
They must be paid back to the government
Only corporations have access to automatic stabilizers
