AnswersMPS SS131CA Citizenship S2Unit Test

Unit Test — Unit test Answers

15 verified answers
1
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Which body manages the Fed?

t
the Appropriations Committee
t
the Federal Reserve Board
t
the Federal Open Markets Committee
t
the Economic Policy Subcommittee
2
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Which of these are goals of an expansionary policy? Check all that apply.increased available creditdecreased available creditincreased money supplyincreased inflationincreased interest ratesdecreased interest rates

A
increased available credit
B
decreased available credit
C
increased money supply
D
increased inflation
E
increased interest rates
F
decreased interest rates
3

Expansionary spending takes place when a government makes the decision to

p
put a freeze on the number of its employees.
r
raise taxes to balance its budget.
r
raise taxes to run a budget surplus.
r
raise spending to stimulate the economy.
4

Which best describes why governments collect taxes?

A
to control the value of currency
B
to keep the government running
C
to ensure surplus funds
D
to fund government programs
5

In which of the following ways do governments spend money to meet public needs? Check all that apply.by protecting the publicby arming the publicby providing health careby supporting educationby building roads and bridges

b
by protecting the public
b
by arming the public
b
by providing health care
b
by supporting education
b
by building roads and bridges
6

What happens when a bank is required to hold more money in reserve?

A
It has less money for loans.
B
It has less money for operations.
C
It has less money for interest payments.
D
It has less money for withdrawals.
7

What part does interest play in deficit spending?

A
Governments must pay interest on money they borrow when they take on debt.
B
Citizens must pay interest when their governments borrow money.
C
Governments may charge foreign countries interest when they borrow money.
D
Interest is not a factor when a government’s budget is in deficit.
8

Which group does the Fed serve?

f
financial institutions
c
consumers
g
government bodies
b
bankers
9

The diagram shows different types of policies.

Question illustration
T
The Best Economic Policies
G
Government Economic Policies
I
Ineffective Economic Policies
T
The Free Enterprise System
10

Occupational Safety and Health AdministrationEnvironmental Protection AgencyFood and Drug AdministrationSecurities and Exchange Commission

A
Occupational Safety and Health Administration
B
Environmental Protection Agency
C
Food and Drug Administration
D
Securities and Exchange Commission
11

Spending that can change from year to year is known as

A
discretionary spending.
B
deficit spending.
C
mandatory spending.
D
expansionary spending.
12

best

a
a tax that charges low-income earners a lower percentage than high-income earners
a
a tax that charges an equal percentage to all
a
a tax that charges earners based on their professions
a
a tax that charges high-income earners a lower percentage than low-income earners
13

US federal income tax is progressive by law, but which best explains why wealthy individuals can often pay far less in taxes than the top tax rate?

H
High-income earners can fight in court for the right to a reduced rate.
H
High-income earners reduce their tax rates through numerous deductions.
H
High-income earners use tax laws to their advantage to reduce their tax rates.
H
High-income earners always place their assets overseas to lower their tax rates.
14

Which statement explains a way how the Securities and Exchange Commission upholds fair business practices?

T
The SEC makes sure that banks follow federal laws.
T
The SEC tries to limit risk in the financial system.
T
The SEC generally oversees banking practices.
T
The SEC generally oversees financial advisers.
15

The EPA tries to balance protecting business interests with protecting

f
food.
a
air.
c
consumer products.
m
medical devices.

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