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Unemployment and Fiscal Policy Concepts

Total questions: 37

Worksheet time: 19mins

Name
Class
Date
1.

A Ski Instructor does not have a job in July. What type of Unemployment is this?

a)
Seasonal unemployment
b)
Structural unemployment
c)
Frictional unemployment
d)
Cyclical unemployment
2.

C+G+I+(X-M) calculates what?

a)
Gross Domestic Product (GDP)
b)
Balance of Trade (BoT)
c)
Consumer Price Index (CPI)
d)
Net National Product (NNP)
3.

What does the G stand for in C+G+I+(X-M)?

a)
Government spending
b)
Global trade
c)
General revenue
d)
Gross income
4.

Who carries out Fiscal Policy?

a)

Federal Reserve Bank

b)

The Federal Government

c)

The Congress

d)

The President

5.

When you compare prices for two pairs of shoes on line you are using money as a

a)

unit of account

b)
currency standard
c)

Store of Value

d)
price indicator
6.

Unemployment due to people looking for better jobs

a)
Structural unemployment
b)
Cyclical unemployment
c)
Seasonal unemployment
d)
Frictional unemployment
7.

This is money that has value because the government says it does.

a)
Fiat money
b)
Barter system
c)
Digital currency
d)
Commodity money
8.

This person is the Chairman of the Federal Reserve.

a)
Jerome Powell
b)
Ben Bernanke
c)
Alan Greenspan
d)
Janet Yellen
9.

How many districts are there in the Federal Reserve System?

a)
12
b)
8
c)
15
d)
10
10.

In C+G+I+(X-M) what does the (X-M) represent?

a)
Total trade balance
b)
Net exports (exports minus imports)
c)
Government spending adjustments
d)
Consumer spending fluctuations
11.

What is the lowest part of the buisness cycle?

a)
Trough
b)
Recession
c)
Peak
d)
Expansion
12.

What is monetary policy?

a)
Monetary policy is the method of setting tax rates by the government.
b)
Monetary policy refers to the regulation of stock market investments.
c)
Monetary policy is the strategy for managing public spending and budgets.
d)
Monetary policy is the process by which a central bank manages the money supply and interest rates.
13.

What happens to old currency when it is worn out?

a)

It is burned

b)

It is shredded

c)

It is recycled

d)

it is given away in poor countries

14.

Where is the nearest Federal Reserve Bank?

a)

Boston

b)

New Orleans

c)

Atlanta

d)

Memphis

15.

What is considered Full Employment in the United States?

a)
Full employment is considered to be around 4% to 5% unemployment.
b)
Full employment is achieved when there is no unemployment at all.
c)
Full employment occurs when unemployment is at 6% or higher.
d)
Full employment is defined as 2% to 3% unemployment.
16.

Which of these people would NOT be part of the labor force?

a)
Students in full-time education
b)
Retired individuals
c)
Unemployed individuals
d)
Stay-at-home parents
17.

What is the highest part of the business cycle?

a)
Recession
b)
Expansion
c)
Peak
d)
Recovery
18.

Which institution is responsible for the control in the Money supply in the United States?

a)
The Treasury Department
b)
The Securities Exchange Commission
c)
The Federal Reserve
d)
The Federal Trade Commission
19.

Which statement is NOT true about the Federal Reserve?

a)

It is both public and private

b)

It is charged with setting Fiscal Policy

c)

There is a Board of Governors

d)

There are 12 District Banks around the U.S.

20.

Sum of the employed and the unemployed

a)

Employed

b)

Unemployment

c)

Labor Force

21.

What measure shows how well the economy is doing over time?

a)

Gross Domestic Product

b)

Unemployment Rate

c)

Inflation Rate

22.
What term is used to describe the percent of the labor force that does not have a job but is currently looking for one?
a)
Leading economic indicator
b)
Full employment
c)
Unemployment rate
d)
Structural unemployment
23.

Money that is backed by gold of silver is this type of money.

a)

Representative money

b)
Barter system
c)
Digital currency
d)
Fiat money
24.

What does the I in C+G+I+(X-M) stand for?

a)
Income
b)
Inflation
c)
Interest
d)
Investment
25.

Who makes the day to day decisions for the Federal Reserve Bank?

a)
The Chair of the Federal Reserve and the Board of Governors.
b)
The Senate Banking Committee.
c)
The Secretary of the Treasury.
d)
The President of the United States.
26.

If you lost your job due to a recession you are this type of unemployed.

a)
cyclically unemployed
b)
seasonally unemployed
c)
frictionally unemployed
d)
structurally unemployed
27.

What does GDP mesure?

a)
GDP measures the population growth of a country.
b)
GDP measures the total number of businesses in a country.
c)
GDP measures the environmental impact of a country's industries.
d)
GDP measures the economic output of a country.
28.

What does the Consumer Price Index (CPI) measure?

a)
The CPI measures the unemployment rate in the economy.
b)
The CPI measures the total income of consumers in a country.
c)
The CPI measures the average change in prices for consumer goods and services.
d)
The CPI measures the production output of factories and industries.
29.

This is the amount that banks are required to keep on hand and cannot loan out

a)
Liquidity ratio
b)
Loan-to-deposit ratio
c)
Reserve requirement
d)
Capital reserve
30.

If the federal government gives tax breaks to electric vehicle manufacturers and increases taxes on fossil fuel vehicles, to promote clean energy, this will affect taxing and spending. What kind of economic policy deals with taxing and spending?

a)

monetary policy

b)

social policy

c)

fiscal policy

31.

Monetary policy refers to what?

a)

The federal government’s overall approach to spending, borrowing, and taxation.

b)

How government regulates the amount of money in circulation

c)

A general, sustained upward movement of prices for goods and services in an economy.

d)

The upper limit set on the amount of money the government may borrow to meet its existing legal obligations.

32.

To help the economy grow, the government can

a)

Increase taxes

b)

Increase spending

c)

Decrease spending

d)

Increase interest rates

33.

Which of the following are fiscal policy tools (select 2)?

a)

adjusting the reserve requirement

b)

adjusting the discount rate

c)

changing government spending

d)

changing income taxes

e)

buying/selling bonds via open market operations

34.

An action that the government might take when implementing expansionary fiscal policy would be:

a)

raising interest rates

b)

reducing government spending

c)

lowering taxes

d)

decreasing the money supply

e)

decreasing transfer payments

35.
Taxing & spending to help the economy grow is referred to as
a)
expansionary policy
b)
monetary policy
c)
contractionary policy
d)
budget deficit
36.
Taxing & spending to slow the economy is referred to as 
a)
budget surplus 
b)
monetary policy
c)
contractionary policy
d)
budget deficit
37.
An example of expansionary fiscal policy would be
a)
cutting taxes.
b)
cutting government spending.
c)
cutting production of consumer goods.
d)
cutting prices of consumer goods.