Download Economics Assessment Matching: Board of Governors A. Consists of

Economics Assessment
Matching:
1. Board of Governors
2. Federal Open Market Committee
3. laissez-faire
4. monetary policy
5. fiscal policy
6. free enterprise
7. reserve requirement
8. market
9. Keynesiansim
10. budget deficit
A. Consists of 7 members of the Board of Governors
and 5 Federal Reserve Bank Presidents; it steers the
the strategy of the Fed’s monetary policy.
B. 7 member Fed body appointed by the President and
confirmed by the Senate for 14-year terms; it
supervises banking services, issues monetary
policies, oversees district/member bank activities,
and approves the appointments of their presidents.
C. Economic system classification in which business can
be conducted with little government intervention.
D. Percentage of deposits a bank must keep on deposit.
E. Set of procedures designed to regulate the economy
by controlling the amount of money in circulation as
well as the level of interest rates.
AB. Economic doctrine, named after a British
economist, that supports an active government
role in economic stabilization.
AC. Economic doctrine that holds the economy would
prosper by itself if left alone.
AD. Overall government program that establishes levels
of taxation, spending, and borrowing that promote
the desired economic goals for the nation.
AE. A place or situation in which buyers and sellers
interact for the purpose of exchanging goods and
services.
BC. Results when the government spends what it does
not have. The national debt represents the
accumulation of these.
Multiple Choice:
11. What are the two central goals for economic stabilization?
A.
B.
C.
D.
A weak dollar and low employment.
Low inflation and full employment.
A strong market and successful banking system.
Excellent GNP and high inflation.
Questions 12-14 are taken from the following graph.
D
A
B
C
12. Which letter represents the law of demand?
A.
B.
C.
D.
E.
13. Which price would result in a market surplus?
A.
B.
C.
14. Which price is the equilibrium price?
A.
B.
C.
E
Matching
A.
Tax exemption(s)
B. Tax deductions
C. supply-side economics
D. standard of living
E. Income redistribution
AB. recession
AC. economic stabilization
AD. Inflation
AE. Fiscal policy
BC. Monetary policy
BD. Disposable income
BE. Demand-side economics
CD. budget deficit
CE. Federal budget
DE. CBO (Congressional
Budget Office)
ABC. OMB (Office of
Management and Budget)
ABE. uncontrollable
spending
(entitlements)
BCD. GAO (General Accounting
Office)
ABD. GDP (Gross Domestic Product)
BCE. national debt
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
31.
32.
33.
Amounts that the government allows taxpayers to subtract from their taxable income.
How well the people in general are doing.
The general rise in prices that often accompanies economic booms.
Economic downturn, or a period of economic contraction when the pace of economic activity and level of
economic growth is lessened. It is typically characterized by higher rates of unemployment.
An amount of income upon which the government does not levy a tax.
Occurs when government expenses exceed government revenues.
Economic doctrine that argues that a market economy, working properly and left alone, most likely will operate
at full employment and low inflation and that economic downturns have occurred because government policies
have interfered in the economy’s operation and drastically cut the supply of money.
Economic doctrine that supports active government stabilization during economic downturns to counteract
instability in the normal operation of an otherwise free market. Such stabilization policies involve running
budget deficits and to use monetary policy to provide low interest rates—in short, both fiscal and monetary
policies would be used to stimulate the economy.
Government tax and spend policies seek to “equalize” the wealth and income produced by the economy that
would have otherwise been distributed “unfairly”.
Results from both full employment and low inflation.
The U.S. national spending program.
A set of procedures designed to regulate the economy by controlling the amount of money in circulation as well
as the level of interest rates.
A set of government spending, taxing, and borrowing policies used to achieve desired levels of economic
performance.
A term that refers to spending based on the government’s prior legal commitments—this type of spending
occurs each year without specific appropriation. Major examples include payments on the national debt,
current payments under contracts the government signed in the past, and benefits, such as Social Security and
Medicare, that federal law requires be given to all persons who legally qualify for them.
The amount of money people have to spend after accounting for financial obligations such as taxes.
An executive branch agency within the Executive Office of the President that is responsible for preparing the
president’s budget request.
An agency created by Congress to provide legislators with data and technical assistance on financial policy,
issues surrounding government programs, and other spending-related matters.
The total dollar value, or price, of all finished goods and services produced within a country during one year.
A congressional agency responsible for watching over the spending of funds appropriated by Congress.
Matching (part 2)
A. Supply
B. Circular Flow Model
C. market
D. commerce
34. Visualizes how all interactions occur in a market.
35. Quantity of a good or services consumers are willing and able to buy at various prices.
36. A place or situation where buyers and sellers interact for the purpose of exchange.
37. The exchange of goods and services.
38. The supply of an economic product varies (A.) directly (B.) inversely with its price.
39. Which of the following is not among the “market mechanisms” that the free market operates under?
a. law of supply and demand
b. government
c. law of self-interest
d. law of competition
40. Which of the following monetary policy implementation tools is used most frequently by the Fed?
A.
B.
C.
D.
open market operations
the discount rate
reserve requirements
taxation
41. What is the most effective way federal government may use fiscal policy to encourage growth?
A.
B.
C.
D.
42.
The individual income tax is levied on people’s
a.
b.
c.
d.
43.
increase taxes, lower spending
increase spending, lower taxes
lower spending, lower taxes
increase spending, increase taxes
wages or salaries and tips.
wages or salaries, tips, interest, and dividends.
income from any source.
investment returns.
What does the U.S. government do to achieve a stable economy?
a.
b.
c.
d.
implement monetary and fiscal policies
try to enlarge the budget deficit
improve the silver standard
impose excise taxes
44.
An excise tax is a regressive tax because it
a.
b.
c.
d.
45.
charges every taxpayer the same rate.
regresses taxpayers’ rates one year.
never changes.
is disliked by most IRS officials.
Many economists believe that boom and recession cycles are typical of a
a. depression.
b. Western economic model.
46.
Government taxing, spending, and borrowing policies used to achieve a strong economy are
Called
a. financial policies.
b. interest policies.
47.
hundreds of Federal Reserve banks in countries around the world.
12 regional Federal Reserve banks and thousands of privately owned member banks.
banks and savings and loans in the United States and abroad.
one main federal bank in Washington, D.C.
When the Federal Reserve buys government securities from private investors, the money supply in the economy
a. increases.
b. moves to zero.
49.
no social classes and no economic classes.
no government.
no worker ownership of means of production.
no private property.
All of the following are characteristics of a capitalist economy EXCEPT
a. competition.
b. private ownership.
52.
c. increase spending.
d. eliminate interest rates.
All of the following are characteristics of an ideal communist society, as envisioned by Karl Marx, EXCEPT
a.
b.
c.
d.
51.
c. decreases.
d. stays the same.
If a quickly growing economy produces inflation, the government will probably
a. decrease spending.
b. lower taxes.
50.
c. fiscal policies.
d. economic policies.
The Federal Reserve system consists of
a.
b.
c.
d.
48.
c. dictatorship.
d. free-market system.
c. collectivization.
d. profit.
Adam Smith believed that the main motivation for economic behavior was
a. politics.
b. self-interest.
c. generosity.
d. poverty.
53.
In a socialist economy, wealth is
a. redistributed throughout society.
b. held primarily by politicians.
54.
c. concentrated in the middle class.
d. approved of, especially for aristocrats.
Adam Smith argued that government interference with the economy
a.
b.
c.
d.
should be promoted by political leaders.
was advisable, especially during depressions and recessions.
restricted the market’s ability to function well.
resulted in a stable stock market.
Part III Matching: Correctly label the various parts of the circular flow model illustrated below by matching the number of each
item in the word bank with the correct letter (i.e. part of the illustrates it constitutes).
55. Business revenue
56. Payment for resources
58. Buy factors of production (resources)
57. Consumer spending
59. Sell goods and services
60. Sell resources, or factors of production (land, labor, capital, and entrepreneurship)
61. Income from resources
62. Buy goods and services