Answers2026-2027 FBISD - EconomicsMonetary Policy: The Federal Reserve

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22
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Under an expansionary taxation policy, the government tries to stimulate economic growth by

A
reducing deficits.
B
reducing taxes.
C
reducing demand.
D
reducing spending.
23
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What responsibility does the mayor or city manager have in the budgeting process?

A
vetoing line-items in the budget
B
approving or rejecting the budget
C
putting the budget into effect
D
writing and presenting the budget
24

Which method of increasing government revenue has an immediate effect?

A
raising the minimum wage
B
lowering income taxes
C
increasing the sales tax
D
giving property tax breaks
26

In which situation would government regulation most likely be necessary?

A
A factory requires employees to work in unsafe conditions.
B
A restaurant requires employees to work overtime on weekends.
C
A computer company requires employees to work long hours.
D
A power plant requires employees to take safety training classes.
27

Monetarism plays a role in economic growth by

A
expanding government intervention.
B
influencing the supply of goods.
C
expanding government spending.
D
influencing the supply of money.
28

The Food and Drug Administration sets standards for

A
advertising.
B
product labeling.
C
the environment.
D
traffic safety.
29

John Maynard Keynes believed that governments should increase spending in order to

A
increase prices.
B
increase supply.
C
decrease demand.
D
increase demand.
30

Which is an example of a city raising revenue for a specific need?

A
An increase in vehicle licenses pays for roads.
B
A new tax is approved to pay for fire services.
C
Income tax is paid every year on April 15th.
D
Payroll taxes are taken out of each paycheck.
31

A graph shows the U S Government and Expenditures from 1980 to 2010. The money spent and money received generally follow the same trend, but around 2008, the amount of money spent increased and money received decreased.

Question illustration
A
Federal law requires the budget to be balanced.
B
Politicians do a good job in balancing the budget.
C
In most years, the federal budget shows a surplus.
D
Lines seldom overlap showing a mostly unbalanced budget.
32

Which are results of regulation in a mixed-market economy? Check all that apply.compliance with lawsadvantages for producerscontrol of marketsadvantages for governmentcontrol of externalities

A
compliance with laws
B
advantages for producers
C
control of markets
D
advantages for government
E
control of externalities
33

Which statement best describes how the Fed responds to recessions?

A
It sells more securities.
B
It charges banks more interest.
C
It increases reserve requirements.
D
It increases the money supply.
34

Which of these best describes income tax?

A
regressive tax
B
indirect tax
C
direct tax
D
proportional tax
35

A graph shows the U S Government and Expenditures from 1980 to 2010. The money spent and money received generally follow the same trend, but around 2008, the amount of money spent increased and money received decreased.

Question illustration
A
1980 to 1990
B
1980 to 2000
C
1990 to 2000
D
2000 to 2010
36

The chart shows a cost-benefit analysis.

Question illustration
A
The EPA legislates and enforces more regulations that reap greater benefits than the other agencies.
B
The EPA legislates and enforces food regulations that reap greater benefits than the other agencies.
C
The EPA has a larger budget than the other agencies, and its employees work longer hours.
D
The EPA is less efficient than the other agencies, and its employees spend more money.
37

Which best describes a central bank's primary role?

A
controlling inflation
B
increasing credit
C
printing money
D
creating monetary policy
38

Which economist most likely would have agreed with the US government’s intervention during an economic crisis in 2008?

A
Friedrich von Hayek
B
Adam Smith
C
John Maynard Keynes
D
Milton Friedman
39

Who was known as the "Father of Economics,” whose ideas of free markets inspired classical economic thinkers?

A
John Keynes
B
Milton Friedman
C
Friedrich Hayek
D
Adam Smith
40

Which statement explains how regulations on prices affect business practices?

A
Regulations keep prices fair and prevent businesses from establishing monopolies.
B
Regulations keep prices low and help businesses to establish monopolies.
C
Regulations keep prices fair and help businesses to establish monopolies.
D
Regulations keep prices low and prevent businesses from establishing monopolies.
41

Which statements best describe sales tax? Check all that apply.Sales tax does not affect low-income groups.Sales tax is an indirect tax levied on goods and certain services.Sales tax is a type of regressive taxation.Sales tax is a direct tax paid by consumers to the government.Sales tax affects high-income groups.

A
Sales tax does not affect low-income groups.
B
Sales tax is an indirect tax levied on goods and certain services.
C
Sales tax is a type of regressive taxation.
D
Sales tax is a direct tax paid by consumers to the government.
E
Sales tax affects high-income groups.

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