#1
Which of the following is a tool of fiscal policy?
Monetary policy
Interest rates
Government expenditure
Foreign exchange rates
#2
What does expansionary fiscal policy involve?
Reducing government spending
Increasing taxes
Increasing government spending
Decreasing taxes
#3
What is the primary objective of fiscal policy?
To stabilize prices
To maximize government revenue
To control inflation
To achieve full employment and economic growth
#4
Which of the following is an example of contractionary fiscal policy?
Increasing government spending
Reducing taxes
Decreasing government spending
Cutting interest rates
#5
Which of the following is an example of discretionary fiscal policy?
Automatic stabilizers
Unemployment benefits
Tax cuts
Social security payments
#6
During an economic recession, which fiscal policy action would be appropriate?
Increase taxes
Decrease government spending
Implement contractionary fiscal policy
Implement expansionary fiscal policy
#7
Which of the following is NOT a component of government expenditure?
Transfer payments
Defense spending
Social security benefits
Interest payments
#8
What is the term for government spending that occurs automatically, without the need for annual approval from Congress?
Discretionary spending
Mandatory spending
Emergency spending
Entitlement spending
#9
What is the term used to describe the situation when government spending exceeds government revenue?
Budget surplus
Budget deficit
National debt
Fiscal gap
#10
Which of the following is an example of automatic stabilizers in fiscal policy?
Unemployment benefits
Infrastructure projects
Tax cuts
Discretionary spending
#11
What is the name of the phenomenon where a government reduces the value of its currency to make its exports more competitive?
Devaluation
Revaluation
Appreciation
Depreciation
#12
Which of the following statements about fiscal policy is true?
It is solely determined by the central bank
It is used to regulate the money supply
It can only influence aggregate demand
It involves government manipulation of taxation and spending
#13
What is the name of the theory suggesting that an increase in government spending will stimulate economic growth?
Ricardian equivalence
Supply-side economics
Keynesian economics
Monetarism
#14
What is the name of the law stating that changes in taxes or government spending have a multiplied effect on the economy?
Laffer curve
Ricardian equivalence
Multiplier effect
Phillips curve
#15
In the context of fiscal policy, what does the term 'crowding out' refer to?
An increase in private sector investment due to government spending
A decrease in private sector investment due to government borrowing
A decrease in government spending due to increased taxation
An increase in government spending due to decreased taxation
#16
What is the primary concern regarding a large budget deficit?
Decreased inflation
Increased government spending
Higher interest rates
Stimulated economic growth
#17
What is the term for a policy that seeks to achieve economic stability through changes in government spending and taxation?
Monetary policy
Supply-side policy
Fiscal policy
Inflation targeting