#1
Which of the following is a tool of fiscal policy?
Monetary policy
Interest rates
Government spending
Inflation targeting
#2
What is the primary goal of contractionary fiscal policy?
Boost employment
Stabilize prices
Promote economic growth
Reduce government debt
#3
Which factor is NOT considered when evaluating the effectiveness of fiscal policy?
Timing of policy implementation
Magnitude of policy changes
Political considerations
Global economic conditions
#4
In fiscal policy, what does the term 'discretionary' refer to?
Automatic changes in government spending
Planned and deliberate policy actions
Market-driven adjustments
Unpredictable economic shocks
#5
Which economic indicator is commonly used to assess the overall health of an economy?
Consumer Price Index (CPI)
Stock market indices
Gross Domestic Product (GDP)
Exchange rates
#6
Which term refers to the situation where government spending exceeds revenue, leading to a budget deficit?
Fiscal surplus
Budget equilibrium
Fiscal deficit
Monetary excess
#7
What is the primary objective of expansionary fiscal policy?
Reduce inflation
Stimulate economic growth
Decrease government debt
Stabilize exchange rates
#8
Which of the following is an automatic stabilizer in fiscal policy?
Government subsidies
Unemployment benefits
Income taxes
Import tariffs
#9
What is the Laffer Curve used to illustrate in fiscal policy?
Tax revenue and tax rates
Government spending and economic growth
Interest rates and inflation
Unemployment and GDP
#10
Which fiscal policy tool involves changing the money supply to influence economic activity?
Taxation
Government spending
Monetary policy
Supply-side policy
#11
Which fiscal policy approach focuses on reducing tax rates to stimulate economic growth?
Keynesian economics
Supply-side economics
Monetarism
Austrian economics
#12
In the context of fiscal policy, what does the term 'multiplier effect' refer to?
The impact of government spending on the overall economy
The effect of tax cuts on consumer spending
The influence of interest rates on investment
The relationship between inflation and unemployment
#13
Which fiscal policy tool is used to encourage specific industries or activities?
Monetary policy
Supply-side policy
Automatic stabilizers
Contractionary policy
#14
What is the crowding-out effect in economics?
Increased government spending
Decreased interest rates
Reduced private sector borrowing
Increased consumer spending
#15
During a recession, which fiscal policy action is most suitable?
Decrease government spending
Increase taxes
Implement contractionary policy
Implement expansionary policy
#16
Which economic indicator is often used to determine the effectiveness of fiscal policy?
Gross Domestic Product (GDP)
Consumer Price Index (CPI)
Stock market indices
Exchange rates
#17
In fiscal policy, what does the term 'automatic stabilizer' refer to?
Predictable government spending
Built-in features that offset economic fluctuations
Emergency stimulus measures
Unpredictable tax changes
#18
What is the primary drawback of using discretionary fiscal policy to stabilize the economy?
It is too slow to implement
It can lead to unpredictable outcomes
It requires international cooperation
It is not effective in the long run
#19
What is the main purpose of countercyclical fiscal policy?
To amplify economic fluctuations
To stabilize the economy against cyclical changes
To promote inflation
To encourage speculative investments
#20
What is the main difference between fiscal policy and monetary policy?
Fiscal policy is controlled by the central bank, while monetary policy is controlled by the government
Fiscal policy involves changes in the money supply, while monetary policy involves changes in government spending
Fiscal policy involves changes in government spending and taxation, while monetary policy involves changes in the money supply and interest rates
Monetary policy focuses on long-term economic stability, while fiscal policy focuses on short-term economic fluctuations