#1
Which of the following is an example of a fiscal policy tool?
Monetary policy
Interest rates
Taxation
Inflation targeting
#2
What is the primary objective of expansionary fiscal policy?
Reduce government spending
Decrease taxes
Stimulate economic growth
Reduce inflation
#3
What is the main goal of contractionary fiscal policy?
To increase government spending
To reduce unemployment
To decrease aggregate demand
To stimulate economic growth
#4
Which of the following is a characteristic of a progressive tax system?
Tax rate decreases as income increases
Tax rate increases as income increases
Flat tax rate for all income levels
Tax rate remains constant regardless of income
#5
Which of the following is NOT considered a tool of fiscal policy?
Government spending
Taxation
Interest rates
Transfer payments
#6
What is the term used to describe a situation where government spending exceeds revenue?
Budget deficit
Budget surplus
Balanced budget
National debt
#7
Which of the following is an example of an automatic stabilizer in fiscal policy?
Unemployment benefits
Tax cuts
Infrastructure spending
Quantitative easing
#8
What is the concept of crowding out in fiscal policy?
Increase in private investment due to government spending
Decrease in private investment due to government borrowing
Increase in government borrowing due to decreased private investment
Decrease in government borrowing due to increased private investment
#9
What is the formula for the fiscal multiplier?
1 / (1 - MPC)
1 / MPS
1 / (1 + MPC)
1 / (1 - MPS)
#10
What does the term 'laffer curve' illustrate in fiscal policy?
The relationship between tax rates and tax revenue
The impact of government spending on economic growth
The relationship between inflation and unemployment
The effect of interest rates on consumer spending
#11
Which of the following best describes the concept of 'crowding in'?
Increase in private investment due to government borrowing
Decrease in private investment due to government borrowing
Increase in government borrowing due to increased private investment
Decrease in government borrowing due to increased private investment
#12
What is the name of the economic model that suggests governments should adjust their fiscal policies to stabilize the economy over the business cycle?
Keynesian economics
Monetarism
Supply-side economics
Classical economics
#13
Which of the following statements is true regarding fiscal policy and long-run economic growth?
Fiscal policy has no impact on long-run economic growth
Fiscal policy can directly influence long-run economic growth through investments in education and infrastructure
Fiscal policy only affects short-run economic fluctuations
Long-run economic growth is solely determined by monetary policy
#14
In the context of fiscal policy, what is the 'debt-to-GDP ratio' used to measure?
The government's ability to repay its debt
The level of government spending relative to GDP
The impact of government borrowing on interest rates
The sustainability of the government's debt burden relative to the size of the economy
#15
In fiscal policy, what is the term for the portion of an increase in income that is not saved or taxed, but rather spent on goods and services?
Marginal propensity to consume (MPC)
Marginal propensity to save (MPS)
Multiplier effect
Fiscal dividend
#16
What is the term for the situation when the government spends more money than it collects in revenue?
Budget surplus
Budget deficit
National debt
Fiscal responsibility
#17
Which of the following fiscal policies is most likely to reduce aggregate demand?
Tax cuts
Increased government spending on infrastructure
Expansionary fiscal policy
Contractionary fiscal policy