Copyright

Fiscal & 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!

Page 1

Question 1 1. An expansionary fiscal policy would most likely cause which of the following changes in output and interest rates?

Question 2 2. To counteract a recession, the Federal Reserve should:

Question 3 3. _____ fiscal policy addresses a _____ economy, while _____ fiscal policy addresses an _____ economy.

Question 4 4. The economy has entered a recession with high unemployment. The government will use its fiscal policy toolkit to do what?

Question 5 5. If the supply of money increases, what happens in the money market?

Page 2

Question 6 6. Which of the following will a Keynesian economist most likely favor if the economy is operating at point a?

Question 7 7. What is fiscal policy?

Question 8 8. The government has just lowered personal income taxes. Which of the following best describes the economic effects of this policy?

Question 9 9. If expansionary fiscal policy is necessary, what changes should the government make to spending or taxes?

Question 10 10. 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?

Page 3

Question 11 11. According to Keynesian economists, if policymakers thought the economy was headed into a recession, what action would be most appropriate?

Question 12 12. Which of the following is NOT an example of an automatic stabilizer?

Question 13 13. All of the following are examples of fiscal policy to lower unemployment, EXCEPT:

Question 14 14. Which of the following policies is a component of supply-side fiscal policy?

Question 15 15. According to Keynesian economists, what is the most appropriate time for fiscal authorities to attempt to balance the budget?

Page 4

Question 16 16. The central idea of supply-side economics is that certain types of tax cuts will increase:

Question 17 17. According to supply-side economists, how are taxes and economic growth related?

Question 18 18. What is a progressive tax code?

Question 19 19. Which of the following statements is FALSE regarding the government's fiscal policy toolkit?

Question 20 20. Increasing individual tax rates through fiscal policy will most likely have which effect on the economy?

Page 5

Question 21 21. How does a progressive tax code affect consumers?

Question 22 22. 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 23 23. An automatic stabilizer is BEST defined as _____.

Question 24 24. Which of the following statements is TRUE of expansionary monetary policy during a recession?

Question 25 25. Fiscal policy involves the use of _____ to influence _____.

Page 6

Question 26 26. Which of the following is an example of contractionary monetary policy?

Question 27 27. Which of the following will most likely result due to the replacement of some portion of the federal personal income tax with a national sales tax?

Question 28 28. The expansionary monetary policy is designed to:

Question 29 29. In the case of a proportional tax, individuals are taxed at a rate that is _____.

Question 30 30. Why can recognition lag occur?

Fiscal & 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!

MTTC Economics (007): Practice & Study Guide  /  Business Courses
Support