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The Fed Keeps US On Track
Test Description: Game about keeping the economy on the right track.
Instructions: Answer all questions to get your test result.
1) All of the following are jobs of the Federal Reserve EXCEPT:
A
Lowering/raising interest rates
B
Buying/selling government bonds
C
Keeping the economy stable
D
Running businesses
2) If the Economy is GROWING TOO FAST… the FED will _________________ INTEREST RATES. This will _____________ borrowing.
A
decrease/decrease
B
decrease/increase
C
increase/increase
D
increase/decrease
3) If the Economy is NOT GROWING ENOUGH… the FED will _________________ INTEREST RATES. This will _________________ borrowing.
A
decrease/decrease
B
increase/decrease
C
increase/increase
D
decrease/increase
4) What would be a likely affect of increasing government spending?
A
slower circular flow
B
Lower taxes
C
Less unemployment
D
Lower production
5) What would be a likely affect of decreasing government spending?
A
Higher taxes
B
More production
C
More education
D
Fewer taxes
6) After the housing crash in 2008, there was a recession. People lost a lot of money. What did the Federal Reserve likely do in response?
A
Lowered interest rates to encourage taking out loans.
B
Raised taxes to pay for the debt.
C
Raised interest rates to discourage borrowing.
D
Give people jobs at private businesses.
7) In 1999, technology companies were very successful, resulting in the dot-com bubble. Stock prices skyrocketed. What could the government do to slow the economy down?
A
Raise interest rates.
B
Increase spending.
C
Increase welfare spending.
D
Lower taxes.
8) If the government increases spending, all of the following will happen EXCEPT:
A
Production will increase.
B
Taxes will go up.
C
Taxes will go down.
D
Demand will increase.
9) If the government decreases taxes, all of the following will happen EXCEPT:
A
Demand will increase.
B
The government will be able to decrease the debt.
C
People will have more money to spend.
D
The government will purchase businesses.
10) Too much spending is called _________________. The opposite of that is recession.
A
Opportunity Cost
B
Deflation
C
Inflation
D
Scarcity
*select an answer for all questions
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