Question 1

A)

Match the definition with the tax.

Drag each item to the correct location.

(2 points)

Put responses in the correct input to answer the question. Select a response, navigate to the desired input and insert the response. Responses can be selected and inserted using the space bar, enter key, left mouse button or touchpad. Responses can also be moved by dragging with a mouse.

A tax by state and local governments on the sale of goods and services at the point of sale.

A tax levied on the profits earned from business activities.

A tax paid to local governments by landowners, homeowners, and businesses.

A tax paid on the wages and salaries of employees.

A tax paid on personal earnings from wages, interest, and investments.

Payroll tax

Property tax

Corporate income tax

Individual income tax

Sales tax

Question 2

A) Determine who pays individual income taxes, corporate income taxes, and payroll taxes.(1 point)

Companies pay corporate income taxes and employees pay individual income taxes. Those who are self-employed must pay individual income and payroll taxes.

Companies pay corporate income taxes and employees pay individual income taxes. Those who are self-employed must pay individual income and payroll taxes.

Companies pay individual income, corporate income and payroll taxes, and employees pay individual income and payroll taxes. Those who are self-employed only have to pay individual income taxes.

Companies pay individual income, corporate income and payroll taxes, and employees pay individual income and payroll taxes. Those who are self-employed only have to pay individual income taxes.

Companies pay individual income and payroll taxes, and employees pay payroll taxes. Those who are self-employed must pay payroll taxes.

Companies pay individual income and payroll taxes, and employees pay payroll taxes. Those who are self-employed must pay payroll taxes.

Companies pay corporate income and payroll taxes, and employees pay individual income and payroll taxes. Those who are self-employed may have to pay individual income, corporate income, and payroll taxes.

Companies pay corporate income and payroll taxes, and employees pay individual income and payroll taxes. Those who are self-employed may have to pay individual income, corporate income, and payroll taxes.

Question 3

A)

Which items are part of mandatory spending in the federal government?

Select the three correct answers.

(2 points)

Social Security

Social Security

Federal Bureau of Investigation

Federal Bureau of Investigation

state and local governments

state and local governments

education and transportation

education and transportation

military and defense

military and defense

Medicare andMedicaid

Medicare andMedicaid

Question 4

A) Suppose expenses for Medicare and Medicaid are rising rapidly. Which strategy could the federal government use to solve this situation?(1 point)

Increase payouts for entitlements and decrease income and payroll taxes so that consumers are provided with more money to pay for increased medical costs.

Increase payouts for entitlements and decrease income and payroll taxes so that consumers are provided with more money to pay for increased medical costs.

Make cuts to defense and education spending, and then increase income and payroll tax rates to reduce the effect of increasing expenses in the federal government.

Make cuts to defense and education spending, and then increase income and payroll tax rates to reduce the effect of increasing expenses in the federal government.

Increase corporate and individual income tax rates to raise revenue, and then eliminate payments to state and local governments to cut other costs in the federal government.

Increase corporate and individual income tax rates to raise revenue, and then eliminate payments to state and local governments to cut other costs in the federal government.

Delay payments for the interest on the national debt and increase tax rates for payroll and corporate income taxes to raise funds for Medicare and Medicaid.

Delay payments for the interest on the national debt and increase tax rates for payroll and corporate income taxes to raise funds for Medicare and Medicaid.

Question 5

A)

Arrange the following revenues in the federal government, from greatest to least.

Drag each item to put them in the correct order.

(2 points)

Arrange responses in the correct order to answer the question. Select a response, navigate to the desired position and insert response at that position. Responses can be selected and inserted using the space bar, enter key, left mouse button or touchpad. Responses can be moved using the up and down arrow keys or by dragging with a mouse.

miscellaneous revenue

excise taxes

Social Security and Medicare taxes

individual income taxes

customs duties

corporate income taxes

Question 6

A) How do the instances when expansionary fiscal policy should be used compare with those for contractionary fiscal policy?(1 point)

Expansionary fiscal policy should be used to decrease the unemployment rate and contractionary fiscal policy should be used when economic growth is too fast.

Expansionary fiscal policy should be used to decrease the unemployment rate and contractionary fiscal policy should be used when economic growth is too fast.

Expansionary fiscal policy should be used to increase government revenue and contractionary fiscal policy should be used to increase consumer spending.

Expansionary fiscal policy should be used to increase government revenue and contractionary fiscal policy should be used to increase consumer spending.

Expansionary fiscal policy should be used during recessions to help build the economy and contractionary fiscal policy should be used when there is high inflation.

Expansionary fiscal policy should be used during recessions to help build the economy and contractionary fiscal policy should be used when there is high inflation.

Expansionary fiscal policy should be used to combat high inflation and contractionary fiscal policy should be used to increase government revenue.

Expansionary fiscal policy should be used to combat high inflation and contractionary fiscal policy should be used to increase government revenue.

Question 7

A) Which statement best interprets the trend in the national debt since 2004?(1 point)

The national debt has been steady or slowly decreasing each year since 2004.

The national debt has been steady or slowly decreasing each year since 2004.

The national debt has increased from 2007 to 2009 and from 2015 to 2019.

The national debt has increased from 2007 to 2009 and from 2015 to 2019.

The national debt increased from 2007 to 2009 and has been steady since 2009.

The national debt increased from 2007 to 2009 and has been steady since 2009.

The national debt has been steadily increasing each year since 2004.

The national debt has been steadily increasing each year since 2004.

Question 8

A)

Which situations result in an increase in the national debt?

Select the two correct answers.

(2 points)

a decrease in intragovernmental debt

a decrease in intragovernmental debt

a surplus in the federal budget

a surplus in the federal budget

a balanced federal budget

a balanced federal budget

a decrease in the federal budget'sdeficit

a decrease in the federal budget'sdeficit

an increase in intragovernmental debt

an increase in intragovernmental debt

an increase in the federal budget's deficit

an increase in the federal budget's deficit

Question 9

A) Which statement best describes the roles of the Federal Reserve?(1 point)

The Federal Reserve provides lending directly to consumers, businesses, and other banks.

The Federal Reserve provides lending directly to consumers, businesses, and other banks.

The Federal Reserve prints the currency for the United States and controls the amount of money in circulation.

The Federal Reserve prints the currency for the United States and controls the amount of money in circulation.

The Federal Reserve directs fiscal policy for the financial government, sets interest rates, and regulates the banking industry.

The Federal Reserve directs fiscal policy for the financial government, sets interest rates, and regulates the banking industry.

The Federal Reserve directs monetary policy, sets interest rates, and provides banking services for commercial banks.

The Federal Reserve directs monetary policy, sets interest rates, and provides banking services for commercial banks.

Question 10

A) Compare the functions of the Federal Reserve district banks with those for the Board of Governors.(1 point)

The Federal Reserve district banks direct monetary policy and overlook the banking industry while theBoard of Governors implement the policies from the district banks.

The Federal Reserve district banks direct monetary policy and overlook the banking industry while theBoard of Governors implement the policies from the district banks.

The Board of Governors set the target federal funds rate and overlook the banking industry while the Federal Reserve district banks implement the policies from the Board of Governors.

The Board of Governors set the target federal funds rate and overlook the banking industry while the Federal Reserve district banks implement the policies from the Board of Governors.

The Board of Governors set the discount rate and reserve requirements on banks while the Federal Reserve district banks overlook the banking industry and implement the policies from the Board of Governors.

The Board of Governors set the discount rate and reserve requirements on banks while the Federal Reserve district banks overlook the banking industry and implement the policies from the Board of Governors.

The Federal Reserve district banks set the target federal funds rate and oversee open market operations while the Board of Governors direct monetary policy and set reserve requirements on banks.

The Federal Reserve district banks set the target federal funds rate and oversee open market operations while the Board of Governors direct monetary policy and set reserve requirements on banks.

Question 11

A)

Match the definition with the term provided.

Drag each term to the correct location.

(2 points)

Put responses in the correct input to answer the question. Select a response, navigate to the desired input and insert the response. Responses can be selected and inserted using the space bar, enter key, left mouse button or touchpad. Responses can also be moved by dragging with a mouse.

The purchase and sale of treasury and mortgage-backed securities with dealers.

The interest rate banks charge each other for overnight lending.

The short-term purchase of securities with a dealer for the Federal Reserve to resell the securities at a later date.

The interest rate the Federal Reserve charges to banks for loans issued.

The interest rate a bank charges to its best customers.

The funds a bank must hold against the deposit liabilities.

repurchase agreements

discount rate

prime rate

federal funds rate

open market operations

reserve requirements

Question 12

A)

What effects does the Federal Reserve have on the economy?

Select the three correct answers.

(2 points)

poverty rate

poverty rate

income distribution

income distribution

employment

employment

individual income tax rates

individual income tax rates

economic growth

economic growth

prices

prices

Question 13

A) The economy has been sluggish in recent months with slow economic growth. Explain the policies that the Federal Reserve could use to improve the economy.(1 point)

The Federal Reservepurchases treasuries and securities, and also issues new repurchase agreements. The increase in the money supply increases interest rates and inflation, which spurs economic growth.

The Federal Reservepurchases treasuries and securities, and also issues new repurchase agreements. The increase in the money supply increases interest rates and inflation, which spurs economic growth.

The Federal Reserve purchases treasuries and securities and also issues new repurchase agreements. The increase in the money supply and decrease in interest rates result in more lending and risk.

The Federal Reserve purchases treasuries and securities and also issues new repurchase agreements. The increase in the money supply and decrease in interest rates result in more lending and risk.

The Federal Reserve sells treasuries back to banks and issues new reverse repurchase agreements. The decrease in the money supply increases interest rates, which increases lending.

The Federal Reserve sells treasuries back to banks and issues new reverse repurchase agreements. The decrease in the money supply increases interest rates, which increases lending.

The Federal Reserve stops purchasing treasuries and securities, and then issues new reverse repurchase agreements. The short-term profits and decrease in the money supply cause a decrease in interest rates and increased lending.

The Federal Reserve stops purchasing treasuries and securities, and then issues new reverse repurchase agreements. The short-term profits and decrease in the money supply cause a decrease in interest rates and increased lending.

Question 14

A) Analyzethe relationship between the federal budget and national debt. Explain howa federal budget deficit and a federal budget surplus influence levels of national debt.(4 points)

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Short Answer Rubric (4 points)

Points Awarded	Criteria
4	The answer is very clear. The answer is fully supported by details. There may be a few errors in grammar, usage, or mechanics. Errors do not interfere with meaning.
3	The answer is clear. The answer is somewhat supported by details. There area few errors in grammar, usage, or mechanics. Errors may interfere with meaning.
2	The answer is somewhat clear. Details are weak or not related. There are some errors in grammar, usage, and mechanics. Errors interfere with meaning.
1	The answer is not very clear. Details are lacking, weak and/or not related. There are severalgrammar errors. Errors interfere with meaning.
0	The question is not answered.

Question 15

A) Compare and contrast the federal funds rate, the discount rate, and the prime rate.(4 points)

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Short Answer Rubric (4 points)

Points Awarded	Criteria
4	The answer is very clear. The answer is fully supported by details. There may be a few errors in grammar, usage, or mechanics. Errors do not interfere with meaning.
3	The answer is clear. The answer is somewhat supported by details. There area few errors in grammar, usage, or mechanics. Errors may interfere with meaning.
2	The answer is somewhat clear. Details are weak or not related. There are some errors in grammar, usage, and mechanics. Errors interfere with meaning.
1	The answer is not very clear. Details are lacking, weak and/or not related. There are severalgrammar errors. Errors interfere with meaning.
0	The question is not answered.

Question 16

A) Explain how implementation of fiscal policies and monetary policies can both be utilized to increase consumer and business spending and spur economic growth. Which of these policies will impact the federal budget and how?(4 points)

BoldItalicUnderlineBullet listNumbered list

Short Answer Rubric (4 points)

Points Awarded	Criteria
4	The answer is very clear. The answer is fully supported by details. There may be a few errors in grammar, usage, or mechanics. Errors do not interfere with meaning.
3	The answer is clear. The answer is somewhat supported by details. There area few errors in grammar, usage, or mechanics. Errors may interfere with meaning.
2	The answer is somewhat clear. Details are weak or not related. There are some errors in grammar, usage, and mechanics. Errors interfere with meaning.
1	The answer is not very clear. Details are lacking, weak and/or not related. There are severalgrammar errors. Errors interfere with meaning.
0	The question is not answered.