The Fed Keeps US On Track Question Preview (ID: 37184)


Game About Keeping The Economy On The Right Track. TEACHERS: click here for quick copy question ID numbers.

If the Economy is GROWING TOO FAST… the FED will _________________ INTEREST RATES. This will _____________ borrowing.
a) increase/increase
b) increase/decrease
c) decrease/decrease
d) decrease/increase

All of the following are jobs of the Federal Reserve EXCEPT:
a) Keeping the economy stable
b) Lowering/raising interest rates
c) Buying/selling government bonds
d) Running businesses

If the Economy is NOT GROWING ENOUGH… the FED will _________________ INTEREST RATES. This will _________________ borrowing.
a) increase/increase
b) increase/decrease
c) decrease/decrease
d) decrease/increase

What would be a likely affect of increasing government spending?
a) Less unemployment
b) Lower taxes
c) Lower production
d) slower circular flow

What would be a likely affect of decreasing government spending?
a) Higher taxes
b) More production
c) Fewer taxes
d) More education

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) Raised interest rates to discourage borrowing.
b) Raised taxes to pay for the debt.
c) Lowered interest rates to encourage taking out loans.
d) Give people jobs at private businesses.

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) Lower taxes.
b) Raise interest rates.
c) Increase spending.
d) Increase welfare spending.

If the government increases spending, all of the following will happen EXCEPT:
a) Taxes will go down.
b) Taxes will go up.
c) Production will increase.
d) Demand will increase.

If the government decreases taxes, all of the following will happen EXCEPT:
a) The government will purchase businesses.
b) Demand will increase.
c) The government will be able to decrease the debt.
d) People will have more money to spend.

Too much spending is called _________________. The opposite of that is recession.
a) Inflation
b) Deflation
c) Scarcity
d) Opportunity Cost

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