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ILTS Business: Fiscal & Monetary Policy 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. If the Federal Reserve lowers reserve requirements, nominal GDP will most likely do which of the following?

Question 2 2. How could monetary policy lower inflationary expectations?

Question 3 3. How do automatic stabilizers affect the government's budget during an economic recession?

Question 4 4. If the supply of money increases, what happens in the money market?

Question 5 5. Which of the following statements best describes the use of fiscal policy during a recession?

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Question 6 6. 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 7 7. How do automatic stabilizers benefit the economy?

Question 8 8. What is the reserve requirement?

Question 9 9. 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 10 10. An automatic stabilizer is BEST defined as _____.

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Question 11 11. Which of the following statements is TRUE of expansionary monetary policy during a recession?

Question 12 12. An economy is facing moderate output growth but significantly high inflation rates. Which of the following policy actions can the Federal Reserve use to address this problem?

Question 13 13. Which of the following is true about fiscal policy?

Question 14 14. When the economy is growing too slowly (recession) or too quickly (high inflation), the two approaches the government can use, according to economists, include which of the following?

Question 15 15. What is fiscal policy?

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Question 16 16. If the supply of money decreases, what happens in the money market?

Question 17 17. The purchases and sales of government securities in the open market by the Federal Reserve are referred to as which of the following?

Question 18 18. What does the word 'fiscal' refer to when discussing fiscal policy?

Question 19 19. The expansionary monetary policy is designed to:

Question 20 20. According to Keynesian economists, why do recessions occur?

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Question 21 21. Which of the following statements is FALSE regarding the government's fiscal policy toolkit?

Question 22 22. Which of the following is FALSE regarding the Federal Reserve?

Question 23 23. How would buying or selling government bonds affect the federal funds rate, if it was the government that initiated the sale?

Question 24 24. Fiscal policy involves the use of _____ to influence _____.

Question 25 25. What are the primary goals of fiscal and monetary policy?

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Question 26 26. The Federal Reserve achieves its monetary goals by doing which of the following?

Question 27 27. How does a progressive tax code affect consumers?

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

Question 29 29. What will happen if the Federal Reserve sells a significant amount of government securities in the open market?

Question 30 30. What is the prime rate?

ILTS Business: Fiscal & Monetary Policy 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!

ILTS Business, Marketing, and Computer Education (171): Test Practice and Study Guide  /  Business Courses
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