1. Contractionary fiscal policy affects the state of the U.S. federal budget. It

Question

1. Contractionary fiscal policy affects the state of the U.S. federal budget. It can create a budget. a. balanced b. deficit c. surplus d. debt 2. The organization within the Federal Reserve that determines monetary policy is: a. the Board of Governors b. the New York Federal Reserve District Bank c. the Federal Open Market Committee d. the Federal Monetary Control Committee 3. Which of the following categories is the largest spending category of the U.S. Federal Budget? a. military purchases b. interest on the national debt c social security (including retirement, Medicaid, Medicare) d. non-military purchases 4. During a recession an existing budget deficit will ceteris paribus. a. increase b. decrease c. remain the same d. is not affected 5. Which of the following is NOT considered part of the money supply? a. the savings bond your Aunt gave you b. money in your checking account c. the cash in your wallet d. deposits at banks

Explanation / Answer

1- contractionary fiscal policy can create surplus budget , because the spendings are reduced or taxes are increased.

so answer is surplus

2- the organization within federal reserve that determines the monetary policy is known as federal open market committee.

so answer is C

3- Largest spendings category on u.s federal budget is social security,

so answer is c

4-during recession the existing budget deficit will increase , because the government will increase their spendings or decrease the taxes.

thus answer is increase

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