Fiscal and Monetary Policies Chapter Exam

Exam Instructions:

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

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Question 1 1. In this graph, where can actual economic output be found?

Question 2 2. Decreasing personal tax rates through fiscal policy will most likely result in:

Question 3 3. What is potential output?

Question 4 4. Assume the economy is in a recession and the Federal Reserve takes the appropriate monetary policy actions. Which of the following shows the affect of the monetary policy?

Question 5 5. Increasing individual tax rates through fiscal policy will most likely have which effect on the economy?

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Question 6 6. Which is true about actual economic output during different times of the business cycle?

Question 7 7. If in fiscal year 2010, the federal government receives $1,800 billion in revenues and spends $1,550 billion on goods and services, what will happen to the national debt?

Question 8 8. Supply-side economic policies are sometimes referred to as:

Question 9 9. How should fiscal policy be used in an inflationary economy?

Question 10 10. How would a government most likely change its tax rates during a recession? Why?

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Question 11 11. Which of the following is an example of contractionary monetary policy?

Question 12 12. Which answer describes the image below?

Question 13 13. What is the major problem with expansionary gaps?

Question 14 14. What is fiscal policy?

Question 15 15. How would we describe an economy that corresponds to the following image?

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Question 16 16. Which of the following reduces the effects of expansionary fiscal policy?

Question 17 17. Why can recognition lag occur?

Question 18 18. The most appropriate countercyclical policy, or stabilization policy, in times of unemployment, according to Classical economists, is for the government to do which of the following?

Question 19 19. In general, because of policy lags, which of the following is true?

Question 20 20. If a nation is operating at full employment and the central bank engages in contractionary monetary policy, how will the interest rate and the unemployment rate change?

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Question 21 21. How could monetary policy lower inflationary expectations?

Question 22 22. The expansionary monetary policy is designed to:

Question 23 23. Which of the following policies would be supported by a supply-side economist?

Question 24 24. What does the word 'fiscal' refer to when discussing fiscal policy?

Question 25 25. Suppose the President plans to cut taxes for consumers and also plans to increase defense spending. How will real GDP and the price level be affected?

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Question 26 26. Which of the following policies is a component of supply-side fiscal policy?

Question 27 27. What is a progressive tax code?

Question 28 28. When the Federal Reserve lowers the discount rate, what will happen?

Question 29 29. If the supply of money increases, what happens in the money market?

Question 30 30. Which of the following tax codes is most progressive?

Fiscal and Monetary Policies Chapter Exam Instructions

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

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