Unit Test — Unit test Answers

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1
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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.
2
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Which best describes a regressive tax?

A
a tax that charges low-income earners a lower percentage than high-income earners
B
a tax that charges an equal percentage to all
C
a tax that charges earners based on their professions
D
a tax that charges high-income earners a lower percentage than low-income earners
3

Expansionary spending takes place when a government makes the decision to

A
put a freeze on the number of its employees.
B
raise taxes to balance its budget.
C
raise taxes to run a budget surplus.
D
raise spending to stimulate the economy.
7

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
8

Spending that can change from year to year is known as

A
discretionary spending.
B
deficit spending.
C
mandatory spending.
D
expansionary spending.
9

This graph shows changes in GDP and the unemployment rate in the United States in recent years.Which statement most accurately describes the trends shown on this graph?

Question illustration
A
When GDP falls, unemployment rises.
B
GDP and unemployment have little to do with each other.
C
When GDP rises, unemployment rises as well.
D
GDP and unemployment rise at times of world crises.
10

The diagram shows different types of policies.

Question illustration
A
The Best Economic Policies
B
Government Economic Policies
C
Ineffective Economic Policies
D
The Free Enterprise System
13

Which group does the Fed serve?

A
financial institutions
B
consumers
C
government bodies
D
bankers
14

Which body manages the Fed?

A
the Appropriations Committee
B
the Federal Reserve Board
C
the Federal Open Markets Committee
D
the Economic Policy Subcommittee

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