Economics MCQ Exam: Trivia Quiz!

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    Unemployment: 6.2% GDP Growth: -0.3% Inflation: 1.7% What type of monetary policy is needed?

    • Easy Money
    • Tight Money
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About This Quiz


Do you think you can pass the economics exam? This quiz can assist you with your studies. Corresponding to the examination, you can get an idea of what questions will be on the exam. You should figure out how money is created in the economy and the money banks keep with every deposit and the required reserve. This economics quiz was designed to help you prepare for the exam.

Economics MCQ Exam: Trivia Quiz! - Quiz

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  • 2. 

    What is Lag Time?

    • The time it takes for a policy change to take effect

    • The desired results happening too quickly

    • Out of date Fed technology

    • Not knowing accurate data

    Correct Answer
    A. The time it takes for a policy change to take effect
  • 3. 

    What happens to the money supply when the Fed lowers the reserve requirements?

    • Increases

    • Decreases

    • Same

    Correct Answer
    A. Increases
  • 4. 

    Initial Deposit = $100 Reserve Requirement = 10% What is the money multiplier?

    • 1

    • 10

    • 100

    • 10%

    Correct Answer
    A. 10
  • 5. 

    What term is used to describe the money that the banks must keep from every deposit?

    • Excess reserves

    • Money multiplier

    • Required reserves

    • Deposit

    Correct Answer
    A. Required reserves
  • 6. 

    What is the Required Reserve?

    • The amount of a deposit the bank may loan out. They CAN give the money out.

    • The amount of a deposit the bank must keep in its vault. They may not loan this money out.

    Correct Answer
    A. The amount of a deposit the bank must keep in its vault. They may not loan this money out.
  • 7. 

    Initial Deposit = $100 Reserve Requirement = 10% What is the amount of excess reserves?

    • $10

    • $100

    • $90

    • $9

    Correct Answer
    A. $90
  • 8. 

    What is Excess Reserve?

    • The amount of a deposit the bank may loan out. They CAN give the money out.

    • The amount of a deposit the bank must keep in its vault. They may not loan this money out.

    Correct Answer
    A. The amount of a deposit the bank may loan out. They CAN give the money out.
  • 9. 

    What type of money is used in the USA today?

    • Specie

    • Fiat

    • Gold-backed

    • Silver-backed

    Correct Answer
    A. Fiat
  • 10. 

    When would the Fed decide to increase the money supply?

    • Recession

    • Inflation

    • Normal Economy

    Correct Answer
    A. Recession
  • 11. 

    What is the name of the 7 people who are at the top of the federal reserve structure?

    • District bank presidents

    • Board of governors

    • American people

    • Federal open market committee

    Correct Answer
    A. Board of governors
  • 12. 

    Which of these is not one of the functions of money?

    • Medium of exchange

    • Store of value

    • Measure of value

    • All are functions

    Correct Answer
    A. All are functions
  • 13. 

    How do we calculate the money multiplier?

    • 1 / Reserve Requirement

    • Excess reserves / required reserves

    • Required reserves / reserve requirement

    • 1 / excess reserves

    Correct Answer
    A. 1 / Reserve Requirement
  • 14. 

    Which of those is not an option the Federal Reserve has to control the economy?

    • Discount rate

    • Reserve requirement

    • Stock options

    • Open market operations

    Correct Answer
    A. Stock options
  • 15. 

    Unemployment: 6.2% GDP Growth: -0.3% Inflation: 1.7% What is the major problem confronting this economy?

    • Recession

    • Inflation

    Correct Answer
    A. Recession
  • 16. 

    The equation for the excess reserve is:

    • 2 x Reserve requirement

    • Total deposit - required reserve

    • 1 / total deposit

    Correct Answer
    A. Total deposit - required reserve
  • 17. 

    When would the Fed decide to increase the interest rates?

    • Downturn

    • Normal Economy

    • Hot Economy

    • Never

    Correct Answer
    A. Hot Economy
  • 18. 

    The equation for finding out the total amount of money created is:

    • Multiplier x excess reserve

    • Required reserve / 10%

    • .1 / multiplier

    Correct Answer
    A. Multiplier x excess reserve
  • 19. 

    What happens to the money supply when the Fed raises the discount rate?

    • Increases

    • Decreases

    • Same

    Correct Answer
    A. Decreases
  • 20. 

    Unemployment: 6.2% GDP Growth: -0.3% Inflation: 1.7% What combination of actions by the Fed would achieve all the desired effects? (HINT: easy money = ____)

    • Raise Discount Rate, Lower reserve requirement, sell bonds

    • Raise discount rate, raise reserve requirement, sell bonds

    • Lower discount rate, lower reserve requirement, buy bonds

    • Lower discount rate, raise reserve requirement, sell bonds

    Correct Answer
    A. Lower discount rate, lower reserve requirement, buy bonds
  • 21. 

    The consumer price index is up and housing starts are at a 15 year high.

    • Easy Money

    • Tight Money

    • Moral Persuasion

    Correct Answer
    A. Tight Money
  • 22. 

    Which person is the current federal reserve chairman?

    • Alan Greenspan

    • Henry Paulson

    • Paul Volcker

    • Ben Bernanke

    Correct Answer
    A. Ben Bernanke
  • 23. 

    What happens to the money supply when the Fed sells government securities?

    • Increases

    • Decreases

    • Same

    Correct Answer
    A. Decreases
  • 24. 

    Unemployment: 6.2% GDP Growth: -0.3% Inflation: 1.7% What type of monetary policy is needed?

    • Easy Money

    • Tight Money

    Correct Answer
    A. Easy Money
  • 25. 

    Who appoints the fed chairman?

    • Treasury secretary

    • Secretary of state

    • President

    • Board of governors

    Correct Answer
    A. President
  • 26. 

    Tight money =

    • High reserve requirement

    • High Discount rate

    • Low Reserve Requirement

    • Low Discount Rate

    • Sell Bonds

    • Buy Bonds

    Correct Answer(s)
    A. High reserve requirement
    A. High Discount rate
    A. Sell Bonds
  • 27. 

    How is money created in our economy?

    • Printing press

    • Banks giving out loans

    • The Fed buying bonds

    • China providing dollars

    Correct Answer
    A. Banks giving out loans
  • 28. 

    The USA is experiencing both high inflation and high unemployment.

    • Easy Money

    • Tight Money

    • Moral Persuasion

    Correct Answer
    A. Tight Money
  • 29. 

    How long is the term of the fed chairman?

    • 1 year

    • 4 years

    • 10 years

    • 14 years

    Correct Answer
    A. 4 years
  • 30. 

    Which district bank president is allowed to always serve on the FOMC and never has to rotate?

    • Washington DC

    • Chicago

    • New York

    • San Francisco

    Correct Answer
    A. New York
  • 31. 

    Unemployment is at 11% and inflation is at 2%.

    • Easy Money

    • Tight Money

    • Moral Persuasion

    Correct Answer
    A. Easy Money
  • 32. 

    How long does the board of governors serve?

    • 1 year

    • 4 years

    • 10 years

    • 14 years

    Correct Answer
    A. 14 years
  • 33. 

    Easy money =

    • High reserve requirement

    • High Discount rate

    • Low Reserve Requirement

    • Low Discount Rate

    • Sell Bonds

    • Buy Bonds

    Correct Answer(s)
    A. Low Reserve Requirement
    A. Low Discount Rate
    A. Buy Bonds
  • 34. 

    Which portion of the fed actually gets to decide on monetary policy?

    • District bank presidents

    • Board of governors

    • American people

    • Federal open market committee

    Correct Answer
    A. Federal open market committee
  • 35. 

    Initial Deposit = $100 Reserve Requirement = 10% How much money will be created from this initial deposit?

    • $990

    • $1000

    • $9000

    • $900

    Correct Answer
    A. $900
  • 36. 

    GDP has dipped from 3% to 1% in the last year.

    • Easy Money

    • Tight Money

    • Moral Persuasion

    Correct Answer
    A. Easy Money
  • 37. 

    Prices are stable, and the GDP is growing at a 3% rate.

    • Easy Money

    • Tight Money

    • Moral Persuasion

    Correct Answer
    A. Moral Persuasion
  • 38. 

    The Fed senses that people are not saving enough.

    • Easy Money

    • Tight Money

    • Moral Persuasion

    Correct Answer
    A. Moral Persuasion

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  • Current Version
  • Mar 20, 2022
    Quiz Edited by
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  • Mar 31, 2011
    Quiz Created by
    Lillsar95
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