WorksheetsUnit 4 Quiz: Public Policy and The Economy
Total questions: 20
Worksheet time: 10mins
Name
Class
Date
1.
What is the primary purpose of taxes in the United States?
a)
To reduce inflation
b)
To fund government programs and services
c)
To lower the money supply
d)
To increase consumer spending
2.
Which of the following is NOT one of the four principles of taxation?
a)
Stability
b)
Certainty
c)
Equity
d)
Efficiency
3.
What does the principle of equity in taxation mean?
a)
Taxes should be easy to understand
b)
Taxes and their use should be fair and equal
c)
Taxes should not interfere with economic decisions
d)
Tax rates should never change
4.
Which tax principle refers to using money wisely?
a)
Convenience
b)
Equity
c)
Efficiency
d)
Certainty
5.
A progressive tax structure means:
a)
C. Higher income earners pay a higher percentage
b)
A. Everyone pays the same dollar amount
c)
B. Lower income earners pay a higher percentage
d)
D. Sales taxes increase for certain items
6.
Which of the following is an example of a regressive tax?
a)
Federal income tax
b)
Property tax
c)
Corporate income tax
d)
Sales Tax
7.
What type of tax charges the same rate to all income levels?
a)
Progressive
b)
Proportional
c)
Regressive
d)
Direct
8.
8. What policy is used by the government to influence the economy through taxes and spending?
a)
Monetary policy
b)
Social policy
c)
Fiscal policy
d)
Trade policy
9.
9. How does the Federal Reserve stabilize the money supply in the economy?
a)
Trade restrictions
b)
Tariffs
c)
Budget cuts
d)
Interest rates and flow of money
10.
What is the purpose of an easy-money policy by the Federal Reserve?
a)
To stimulate the economy by making loans more accessible
b)
To decrease consumer spending
c)
To reduce inflation by limiting loans
d)
To raise tax revenues
11.
10. Which policy aims to reduce inflation by decreasing spending or raising taxes?
a)
Expansionary fiscal policy
b)
Contractionary fiscal policy
c)
Easy-money policy
d)
Stimulus spending
12.
How does Keynesian economics suggest managing a recession?
a)
Reducing the money supply
b)
Increasing taxes and cutting spending
c)
Cutting taxes and increasing government spending
d)
Raising interest rates
13.
What is the main belief of classical economists regarding government intervention?
a)
Government should increase spending in recessions
b)
Government should balance the budget and avoid interference
c)
The government should control prices
d)
The central bank should print more money
14.
What is a core belief of monetarist theory, as proposed by Milton Friedman?
a)
Only demand affects the economy
b)
Government spending should be unlimited
c)
Tariffs increase growth
d)
Controlling the money supply is key to economic stability
15.
Which of the following is a limitation of economic policy?
a)
Time lags in implementing and seeing effects
b)
Too much public input
c)
Unlimited data availability
d)
Lack of government funding
16.
Which of the following is a constitutional power the government holds in the economy?
a)
To control global oil prices
b)
To print foreign currency
c)
To issue corporate bonds
d)
To levy and collect taxes
17.
How does the government promote competition in the economy?
a)
By encouraging monopolies
b)
By banning illegal practices like price fixing and market division
c)
By controlling consumer prices
d)
By nationalizing private companies
18.
What is “regulatory capture”?
a)
When government agencies act in the interest of the industry they regulate
b)
When businesses regulate themselves
c)
When consumers take over agencies
d)
When agencies fine non-compliant companies
19.
Which of the following is a method the government uses to address externalities?
a)
Bailouts and buyouts
b)
Public provision and subsidies
c)
Price controls and rationing
d)
Deregulation and wage setting
20.
What was the primary goal of the stimulus checks issued during COVID-19?
a)
To reduce the national debt
b)
To increase government savings
c)
To encourage spending and stabilize the economy
d)
To eliminate unemployment entirely
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