NEW
Font size
WorksheetsChapter 2 Economics and Finance Quiz
Total questions: 29
Worksheet time: 15mins
What does the Consumer Price Index (CPI) measure?
The value of exports
Average changes in consumer prices over time
Stock market performance
Interest rate changes
Which term describes the natural fluctuation of the economy between growth and recession?
Fiscal policy
Economic indicators
Economic cycle
Currency valuation
Gross Domestic Product (GDP) measures:
Inflation rates only
Total value of goods and services produced in a country
Interest rates
Trade deficits
Which of the following is a leading economic indicator?
GDP
Unemployment rate
Stock market performance
CPI
Currency valuation is primarily affected by:
Bank fees
Monetary donations
Trade balances and interest rates
Stock prices
A country with more imports than exports has a:
Trade surplus
Trade deficit
Balanced budget
Balanced trade
Supply-side economics encourages growth by:
Increasing consumer demand
Cutting taxes and deregulation
Reducing interest rates
Raising tariffs
Keynesian economics suggests the government should:
Cut taxes for corporations only
Reduce spending during recessions
Spend more during economic downturns
Only monitor inflation
Which institution controls the U.S. money supply?
U.S. Treasury
Congress
Federal Reserve
SEC
What does the FOMC primarily do?
Regulate taxes
Control the money supply through open market operations
Manage fiscal policy
Handle consumer price reporting
What happens when the money supply increases?
Interest rates usually rise
Inflation always decreases
Interest rates usually fall
Deflation occurs
Which is an example of monetary policy?
Raising taxes
Government infrastructure spending
Lowering interest rates by the Fed
Passing a federal budget
Which is an example of fiscal policy?
Changing the reserve requirement
Congress increasing spending
The Fed buying Treasury bonds
Adjusting the discount rate
Inflation is defined as:
A decline in consumer prices
Rising interest rates
A general increase in prices
Growth in GDP
Deflation is:
A rapid increase in GDP
Rising interest rates
A general decline in price levels
High unemployment
Which of the following is NOT an economic indicator?
CPI
GDP
Balance sheet
Unemployment rate
A trade surplus occurs when:
Imports exceed exports
Exports exceed imports
There is no trade
Trade is balanced
Which of the following influences currency valuation?
Local weather
Consumer habits
Interest rates and inflation
Population growth
Which group directly sets U.S. monetary policy?
U.S. Congress
Department of Treasury
Federal Open Market Committee (FOMC)
World Bank
When the Fed raises interest rates, what is the expected economic effect?
Spending increases
Inflation rises
Borrowing slows down
Exports increase rapidly
Which of the following best describes fiscal policy?
Adjusting government spending and taxation
Controlling consumer prices directly
Regulating stock market activity
Setting interest rates by the central bank
What is the primary goal of the Federal Reserve's monetary policy?
Maintain price stability and full employment
Regulate international trade
Set tax rates
Increase government revenue
Which of the following would most likely decrease inflation?
Increasing government spending
Lowering interest rates
Increasing the money supply
Raising interest rates
Which action is most likely to stimulate economic growth during a recession?
Reducing the money supply
Lowering taxes
Decreasing government spending
Raising interest rates
What is the likely effect of a strong currency on a country's exports?
Exports become more expensive for foreign buyers
Exports are unaffected
Exports increase rapidly
Exports become cheaper for foreign buyers
Which of the following is considered a lagging economic indicator?
Stock market performance
Unemployment rate
Consumer confidence index
Manufacturing orders
What does Regulation T primarily govern?
Credit extended by banks
Foreign investment rules
Credit extended by broker-dealers for buying securities on margin
Mutual fund disclosures
Regulation U applies to which of the following financial institutions?
Broker-dealers
Mutual fund companies
Banks and other lenders
Foreign governments
Regulation X applies to:
Banks extending loans to U.S. clients
Foreign lenders lending to U.S. persons for purchasing U.S. securities
Mutual fund advertising rules
Broker-dealer account transfers
