CE.13 C, D Question Preview (ID: 24339)


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What is one likely way that the government can support additional spending on public programs?
a) lower taxes
b) raise taxes
c) lower interest rates
d) raise interest rates

The government gets involved in taxing, spending, and borrowing to −
a) provide bureaucratic positions for citizens.
b) influence economic activity.
c) ensure all citizens are paying the same amount of taxes.
d) provide jobs.

Which of these is true when the United States government borrows money?
a) A special tax on investments will be used to repay the money borrowed.
b) The government will not be allowed to borrow again for five years.
c) There will be less money available for businesses and individuals to borrow.
d) The Federal Reserve takes control of the bank the money was borrowed from.

The United States has recently borrowed money in order to pay for new debt expenditures. What is most likely to occur?
a) More funds will be available for individuals to borrow.
b) Fewer funds will be available for individuals to borrow.
c) Tax cuts will go into effect for citizens.
d) The value of the stock market will increase.

Increased government spending increases demand, which may –
a) decrease taxes.
b) increase employment.
c) reduce production.
d) raise interest.

Which amendment authorizes Congress to tax citizens' incomes?
a) Seventh
b) Second
c) Ninth
d) Sixteenth

If the government reduces the taxes on its citizens, what effect will this have on business and private spending?
a) Funds available for growth will decrease
b) More funds will be available for private and business spending
c) The economy will experience a slow down in growth
d) Businesses will have more difficulty starting up

What would be the best title for: Maintains value of U.S. currency, Tries to keep inflation low and stable, and Acts as the federal government's bank?
a) Economic System
b) Private Sector System
c) Federal Reserve System
d) Financial System

The Federal Reserve System tries to keep inflation low and stable by −
a) encouraging higher prices for goods and services.
b) managing the amount of money in the economy.
c) receiving deposits and making loans.
d) paying for public goods and services.

All are roles of the Federal Reserve except −
a) control the amount of money in circulation
b) regulate how much money banks must keep on hand
c) control the interest rates that banks borrow money at
d) regulate the interest rate for home mortgages

One primary duty of the Federal Reserve System is to −
a) make decisions regarding the production of goods and services.
b) contribute to the global flow of capital.
c) control foreign trade.
d) maintain the value of our currency (dollar).

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