ECON - Unit 4C Question Preview (ID: 62185)


SSEMA2, SSEMA3. TEACHERS: click here for quick copy question ID numbers.

Contraction occurs when:
a) there is more taxation and/or less spending by the government
b) there is less taxation and/or more spending by the government
c) ###
d) ####

When the government spends less money than it collects in revenue, it is called:
a) a surplus
b) a deficit
c) ###
d) ####

When the government spends more money than it collects in revenue, it is known as:
a) a deficit
b) a surplus
c) ###
d) ####

Expansion occurs when:
a) there is less taxation and/or more spending by the government
b) there is more taxation and/or less spending by the government
c) ###
d) ####

Taxes and spending are two examples of the government using:
a) fiscal policy tools
b) the circular flow of economics
c) ###
d) ####

During a period of contraction:
a) the GDP decreases, the unemployment rate increases, and there is little inflation
b) the GDP increases, the unemployment rate decreases, and there is some inflation
c) ###
d) ####

The amount of currency in the money supply:
a) affects interest rates
b) has no effect on interest rates
c) ###
d) ####

What occurs when there is more money in the supply and interest rates fall?
a) expansion
b) contraction
c) ###
d) ####

What occurs when there is less money in the supply and interest rates increase?
a) contraction
b) expansion
c) ###
d) ####

During a period of expansion:
a) the GDP increases, the unemployment rate decreases, and there is some inflation
b) the GDP decreases, the unemployment rate increases, and there is little inflation
c) ###
d) ####

Banks keeping a percentage of customer deposits... is called:
a) the reserve ratio
b) the discount rate
c) excess reserves
d) ####

The FED has a direct impact on:
a) interest rates
b) the unemployment rate
c) the per capita GDP of the U.S.
d) ####

From the standpoint of monetary policy, the FED seeks to:
a) keep inflation low and help the economy grow
b) keep inflation high to encourage entrepreneurship
c) increase interest rates
d) ####

How many district banks are associated with the FED?
a) 12
b) 7
c) 25
d) 36

The FED is overseen by:
a) Congress
b) the White House
c) the judicial branch
d) the Federal Open Market Committee

The Federal Reserve is...
a) the central bank of the U.S.
b) another name for the Department of the Treasury
c) an organization responsible for printing U.S. currency
d) ####

When the government has a deficit, it adds to the:
a) national debt
b) GDP
c) price ceilings and price floors
d) ####

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