Unit 3 Macroeconomics Test Review

Fiscal Policy is controlled by...

• The Government

• The Central Bank

• The Department of Commerce

An increase in government spending to help the economy grow is referred to as

• expansionary policy

• monetary policy

• contractionary policy

• budget deficit

A decrease in taxing to help the economy grow is referred to as 

• budget surplus 

• expansionary policy

• contractionary policy

• budget deficit

A decrease in government spending intended to slow the economy is referred to as 

• budget surplus 

• monetary policy

• contractionary policy

• budget deficit

An increase in taxing to slow the economy is referred to as 

• budget surplus 

• monetary policy

• contractionary policy

• budget deficit

An example of expansionary fiscal policy would be

• cutting taxes.
• cutting government spending.
• cutting production of consumer goods.
• cutting prices of consumer goods.

If an economy experiences a dramatic rise in prices, which fiscal policy action could be taken?

• Selling securities on the open market
• Raising interest rates
• Reducing government spending
• Raising reserve requirements

Who is in charge of Monetary Policy

• The Government

• The Federal Reserve

• The States

• The Department of the Treasury

Monetary Policy is the central bank attempts to...

• control the amount of money in circulation

• control the central bank's debt

• control regional governments' spending

• none of these answers are correct.

An expansionary policy means that the central bank is attempting to

• increase the size of the nation's money supply

• decrease the size of the nation's money supply