Unit 6

Question 1

When the revenue exceed expenditures…

Answer 1

There is a budget surplus.

Question 2

Which of the following is a contradictory fiscal policy?

Answer 2

The president and congress pass a new two-cent per gallon gasoline tax.

Question 3

What type of policy does the federal reserve act use to counteract an expansion that is causing high interest rates?

Answer 3

Tight money policy.

Question 4

Suppose the required reserve ratio is 20%. A $5million deposit allows commercial banks to create as much as…

Answer 4

$25 million.

Question 5

The demand for cable television is relatively elastic, since if the price gets too high, people will rent DVDs or videos instead of watching cable. Who is likely to bear the incidence of a 10% tax on cable TV?

Answer 5

The producer

Question 6

What is an entitlement

Answer 6

Social welfare program providing benefits to people certain eligibility requirements

Question 7

What happened to the money that your employer withhold from your paycheck

Answer 7

Your employer sensitive federal government to help pay your income tax bill

Question 8

Supporters of supply-side economics believe that

Answer 8

Texas has a strong negative influence on economic output

Question 9

What is the cost of money

Answer 9

The price of the interest-rate

Question 10

The Federal Reserve system consist of ___ Federal Reserve Banks

Answer 10

12

Question 11

Which of the following defines a means tested programs

Answer 11

Eligibility depends on income

Question 12

Which is an example of discretion spending

Answer 12

Dictation

Question 13

The purpose of an expansionary fiscal policy is to

Answer 13

Increase output

Question 14

Which statement describes the federal government’s fiscal policies in the 1980s

Answer 14

Income tax rates were reduced but spending increased

Question 15

What type of policy does the federal used to counteract a contradiction

Answer 15

Easy money policy

Question 16

Suppose your total taxable income this year is $75,000 your text at a rate of 10% on the first 25,020% on the next 25,030% on the final 25,000 what is your total income tax

Answer 16

$15,000

Question 17

Oh the following people are well-known classical economics except

Answer 17

Arthur laffer

Question 18

Which of these statements is a fundamental part of supply-side economics

Answer 18

The government should reduce taxes to promote economic growth

Question 19

What does lender of last resort mean with the respect to the Federal Reserve

Answer 19

It will lend money to a bank in the financial emergency

Question 20

Which of these situations is the most likely to cause the Fed to introduce a tight money supply

Answer 20

The economy is expanding quickly and inflation is a concern

Question 21

Who generally Bears most of the sales tax when the demand for good tax is inelastic

Answer 21

Consumer

Question 22

Will you try to leave the gas pump you have just paid a

Answer 22

Excise tax

Question 23

All the following are reasons why it is difficult to implement balance physical policy except

Answer 23

The need for discretionary spending

Question 24

Which of these presidents increased talk marginal income tax rates during his term in office

Answer 24

Franklin D Roosevelt

Question 25

The required reserve ratio is 10% the money multiplier is

Answer 25

10

Question 26

I'll but which of the following may be claimed as a tax seduction

Answer 26

Money spent on tax deductions

Question 27

National debt Rose during Ronald Reagan's term as president for all the following except

Answer 27

The cost of running a war a war

Question 28

What will you directly to a government shutdown

Answer 28

The president vetoes congresses appropriate bills

Question 29

Why does the bank sometimes hold excessive reserves

Answer 29

To be sure they can meet their consumers demand

Question 30

What is the relationship between interest rates and demand for money

Answer 30

As interest rates decrease demand for money increases

Question 31

What is the major source of tax revenue for local governments

Answer 31

Property tax

Question 32

Wichita is not a tax-exempt

Answer 32

The convenient store on the corner

Question 33

All the following our problems associated with the national debt except that it

Answer 33

Makes investing in treasury bonds notes and bills very risky

Question 34

How could the Federal Reserve encourage banks to lend out more of the reserves

Answer 34

Reduce the discount rate

Question 35

Which of the following instruments is not used by the Federal Reserveto change the money supply

Answer 35

The federal tax code

Question 36

Your paystub deduct money for FICA what does this mean

Answer 36

Money is being withheld to fund Social Security and Medicare

Question 37

The office of management and budget

Answer 37

Is responsible for different siding how much money each government agency receives in the budget

Question 38

How did the great depression relate to the school of classical economics

Answer 38

The Great Depression appeared to disproof the classical theory that demand and supply could return to a healthy equilibrium through market forces alone

Question 39

Which of the following is one way the Federal Reserve Bank serves the government

Answer 39

Selling government securities

Question 40

Which of these is an example of inside lag in monetary policy

Answer 40

Members of the board of governors disagree on the state of the economy and refused to lower the discount rate until several months after the recession has begun

Question 41

All the following are constitutional limits on the power to tax except that

Answer 41

Exports must not be taxed

Question 42

The federal budget is put together

Answer 42

By Congress and the White House

Question 43

What leads directly to the crowding out effect

Answer 43

A big federal budget deficit

Question 44

How many Federal Reserve districts are there

Answer 44

12

Question 45

What effect would an increase in the discount rate have on the money supply

Answer 45

It would cause the money supply to contract

Question 46

What is the major differences with an operating budget and capital budget

Answer 46

And operating budget is for day-to-day expenses the capital budget is for investment and spending

Question 47

The federal government spends the largest amount of its budget on Social Security which is example of

Answer 47

Mandatory spending

Question 48

All the following are characteristics of classical economics except

Answer 48

A significant role for government in the running of the economy

Question 49

What is the Federal Reserve alter monetary policy

Answer 49

To lessen the effect of natural business cycles

Question 50

As commercial banks keep more excess reserves many creation

Answer 50

Decreases