true
false
One of the main reasons for increasing economic regulations in the United States is the increasing population.
true
false
Increasing the discount rate in order to decrease the money supply is an example of fiscal policy.
true
false
In a recession, fiscal policy calls for the government to decrease taxes and increase spending.
true
false
Monetary policy alone is the most effective economic policy.
true
false
When the Federal Reserve sells government securities, it results in a decrease in the money supply.
true
false
Which of the following is a function of our current banking system?
lending money
acting as a medium of exchange
regulating the money supply
determining the value of money
The purpose of economic regulations in the United States is to
undermine the free-market economy
limit the individual freedoms of all Americans
promote economic growth, stability, and equity
control population growth and birth rates
The Department of Defense is an important part of the economy because
it provides consumers and businesses with protection and a sense of security when making economic decisions
it protects human health and the environment so consumers and businesses will be safe
it develops military strategies during times of war
it provides banking insurance so depositors’ money is protected when it is placed in bank accounts
The Environmental Protection Agency (EPA) impacts the economy by
developing and enforcing regulations that protect human health and the environment
providing consumers and businesses with protection and a sense of security when making economic decisions
providing banking insurance so depositors’ money is protected when it is placed in bank accounts
creating and enforcing truth-in-advertising laws to protect consumers
Crazy Eight is very excited because he is opening a new business. He purchased a building, equipment, a license, and computers, and he remodeled his building. He also was able to acquire a patent for his new idea. He invested all his savings in the new business and he is hoping his new business will take off. Crazy Eight was able to open this new business because
he is leasing the building from the government under an agreement he will manufacture what the government orders
the government guarantees he is able to own property and ideas
he is a good businessman and will succeed
he is able to bypass all the government regulations in order to open an illegal business
John Furry purchased a vacation package from a telephone solicitor. The person asked John for a two-hundred-dollar deposit via credit card in order to reserve his package. John gave the solicitor his credit card number, but he never received the vacation. The agency responsible for investigating this fraud is
the Environmental Protection Agency
the Consumer Product Safety Commission
the Food and Drug Administration
the Federal Trade Commission
In the United States, income tax is an example of a tax, while sales tax is an example of a tax.
progressive; regressive
regressive; progressive
proportional; regressive
progressive; proportional
What economic concept do the Fourth and Fifth Amendments to the Constitution identify?
private ownership of property
competition among businesses
regulation of monopolies
the organization of the Federal Reserve
John Maynard Keynes believed that all economic problems are caused by
unemployment
inflation
decreases in business sector spending
the GDP
In order to control inflation, governments might
sell government securities
increase taxes
decrease government spending
all of the above
George Sparks has just been laid off. He had an excellent job as a computer programmer, but due to company cutbacks he lost his job. While looking for another job, he is able to collect unemployment insurance. This is an example of
discretionary fiscal policy
monetary policy
an automatic stabilizer
taxation
The time period between when an economic policy is decided and when it actually takes effect is called a(n)
lag
automatic stabilizer
waiting period
certification break
What is the purpose of the Federal Reserve?
to regulate the money supply in order to create a stable economy
to control all business exchanges within the United States
to insure all money deposited within banks
to accept deposits and lend money to customers
The main duties of the Fed are to conduct monetary policy, provide banking services to financial institutions, and
regulate the banking industry
conduct fiscal policy
raise and lower taxes
enforce all economic regulations passed by the government
When the Federal Reserve decides it is necessary to expand the money supply, it might
increase the discount rate
decrease the reserve requirement
sell government securities
lower taxes
Hypothetical situation: The economy has been declining for six months. The unemployment rate has increased by 2 percent in the past six months, and many Americans are looking for work. Production has decreased and many businesses are simply not investing or hiring new workers. Consumers are saving (not spending) their money because they are worried about current events. What should the Federal Reserve Board do?
They should do nothing; the economic decreases are due to regular business cycles and the economy will bounce back.
They should raise the reserve rate and sell government securities in order to expand the money supply.
They should lower the discount rate and buy government securities in order to expand the money supply.
They should lower taxes and increase government spending in order to increase overall demand.
I completed the Government Regulatory Agencies Research Activity at the end of objective 1.
true
false
I completed the Economic Advice to the President activity at the end of objective 3.
true
false