#1
Which of the following is an example of a fiscal policy tool?
Taxation
ExplanationFiscal policy uses taxation to influence economic activity.
#2
What is the primary goal of economic policies aimed at social welfare?
Maximizing social equality and well-being
ExplanationSocial welfare policies aim to maximize equality and well-being within society.
#3
What is the main purpose of a progressive tax system?
To tax higher-income individuals at a higher rate
ExplanationProgressive tax systems aim to tax wealthier individuals at higher rates, promoting income equality.
#4
Which of the following is a characteristic of a command economy?
Centralized government control of economic activities
ExplanationIn a command economy, the government centrally regulates economic activities.
#5
What is the purpose of means-tested welfare programs?
To provide assistance based on an individual's income level
ExplanationMeans-tested welfare programs offer support based on an individual's financial need.
#6
Which of the following is a characteristic of a market economy?
Private ownership of resources
ExplanationMarket economies feature private ownership of resources and businesses, with minimal government intervention.
#7
Which economic policy is focused on regulating the overall money supply in an economy?
Monetary policy
ExplanationMonetary policy regulates the money supply and interest rates to influence economic conditions.
#8
What does the term 'welfare state' refer to?
A state where the government provides a basic level of social and economic support for its citizens
ExplanationA welfare state provides fundamental support to its citizens, including social and economic assistance.
#9
What is the primary purpose of social safety net programs?
To provide assistance and support to individuals facing financial hardship
ExplanationSocial safety net programs offer aid to individuals during periods of economic difficulty.
#10
What is the 'Laffer curve' used to illustrate?
The relationship between tax rates and government revenue
ExplanationThe Laffer curve demonstrates how tax rates affect government revenue.
#11
What is the primary objective of unemployment insurance?
To provide financial assistance to workers who lose their jobs
ExplanationUnemployment insurance offers financial aid to individuals who become unemployed.
#12
What is a negative externality in economics?
An unintended cost experienced by a third-party
ExplanationNegative externalities are unintended costs borne by parties not involved in the economic transaction.
#13
Which of the following is an example of a social welfare program?
Unemployment benefits
ExplanationSocial welfare programs, like unemployment benefits, offer support to individuals facing financial challenges.
#14
Which economic policy tool is often used to stabilize the economy during recessions?
Expansionary monetary policy
ExplanationExpansionary monetary policy stimulates economic growth during downturns by increasing the money supply.
#15
Which of the following is an example of a demand-side economic policy?
Increasing public spending on infrastructure projects
ExplanationDemand-side policies, like increasing public spending, aim to stimulate economic growth by boosting demand.
#16
What is the primary aim of supply-side economics?
To stimulate economic growth by incentivizing production
ExplanationSupply-side economics aims to boost economic growth by encouraging increased production.
#17
Which of the following is an example of expansionary fiscal policy?
Increasing government spending and decreasing taxes
ExplanationExpansionary fiscal policy involves boosting government spending and reducing taxes to stimulate economic growth.