Quiz 2 Unit 2

Which government action would be an example of automatic fiscal policy?

A cut in military spending because of a bad economy.

What is NOT true of the Federal Reserve System?

It is responsible for the formulation of fiscal policy.

A recipe for fixing a budget deficit is for the government to __________.

cut expenditures

When Congress creates an act that affects the government's fiscal policy, it is considered a ____________.

discretionary fiscal policy

A(n) ___________ encourages economic growth through tax cuts, a decrease in industrial regulation, increased government spending, or a combination of factors.

expansionary fiscal policy

The ___________ is an annual document created by Congress that details government taxes and spending.

federal budget

What have been the long-term effects of the complete elimination of the gold standard?

more unpredictable fluctuations of the economy

If the Fed wanted to slow down inflation, it would ___________.

sell securities in the open market

Injecting more money into circulation to try and increase economic growth is known as ___________.

stimulus

Fiscal policy is the responsibility of _____________.

the Congress, particularly the House of Representatives

President ___________ was responsible for the dismantling of the first national bank of the United States.

Andrew Jackson

Which of the following would be an example of contractionary fiscal policy?

decrease in government spending

The power of creating monetary policy is the power to __________.

regulate how much money is available for circulation to influence the economy

Which of the following will NOT happen if the Fed buys securities?

the dollar will gain strength against foreign currency

__________ is the economic condition that exists when the government takes in more taxes than it expends.

Budget surplus

Which part of the Federal Reserve System is responsible for creating the policies of the Fed?

Federal Open Market Committee

The Federal Reserve Bank responsible for initiating new Fed policy is based out of __________.

New York

What president was responsible for eliminating the gold standard?

Richard Nixon

Who was responsible for the creation and approval of the Federal Reserve System?

Woodrow Wilson