#1
Which government body in the United States is responsible for fiscal policy?
Department of the Treasury
ExplanationThe Department of the Treasury is responsible for formulating and implementing fiscal policy in the United States.
#2
Which economic indicator is often used to assess the overall health of the U.S. economy?
Gross Domestic Product (GDP)
ExplanationGross Domestic Product (GDP) is a key economic indicator used to assess the overall health and performance of the U.S. economy.
#3
Which branch of the U.S. government has the constitutional authority to levy taxes and allocate government spending?
Legislative branch
ExplanationThe legislative branch of the U.S. government, specifically Congress, has the constitutional authority to levy taxes and allocate government spending.
#4
What is the purpose of the Social Security Trust Fund in the United States?
To fund Social Security benefits
ExplanationThe Social Security Trust Fund in the United States serves the purpose of funding Social Security benefits for eligible recipients.
#5
What is the primary tool used by the government to implement fiscal policy?
Taxation
ExplanationTaxation is the primary tool used by the government to implement fiscal policy, influencing economic activity through revenue collection.
#6
In the context of fiscal policy, what does a 'budget surplus' mean?
Government revenue exceeds spending
ExplanationA 'budget surplus' in fiscal policy occurs when government revenue exceeds its spending, resulting in a positive financial balance.
#7
What is the purpose of the Congressional Budget Office (CBO) in the U.S. government?
Analyzing budgetary and economic issues
ExplanationThe Congressional Budget Office (CBO) plays a crucial role in the U.S. government by analyzing and providing information on budgetary and economic issues.
#8
During an economic recession, which fiscal policy measure is often used to stimulate the economy?
Increasing government spending
ExplanationIncreasing government spending is a common fiscal policy measure during an economic recession to stimulate economic activity and mitigate the downturn.
#9
What is the main difference between fiscal policy and monetary policy?
Fiscal policy involves government spending, while monetary policy involves interest rates.
ExplanationFiscal policy involves government spending decisions, while monetary policy focuses on the control of interest rates and money supply.
#10
Which of the following is a form of automatic fiscal policy stabilizer?
Unemployment benefits
ExplanationUnemployment benefits serve as an automatic fiscal policy stabilizer by increasing during economic downturns, providing support to individuals.
#11
What is the debt ceiling in the context of the United States government finance?
Maximum limit on government debt
ExplanationThe debt ceiling is the maximum limit set by Congress on the amount of money that the federal government is allowed to borrow to meet its obligations.
#12
What is the relationship between the federal funds rate and fiscal policy?
Federal funds rate is a monetary policy tool
ExplanationThe federal funds rate is a tool of monetary policy controlled by the Federal Reserve, distinct from fiscal policy, which involves government spending.
#13
In the U.S., what role does the Office of Management and Budget (OMB) play in the budget process?
Preparing the federal budget
ExplanationThe Office of Management and Budget (OMB) in the U.S. government plays a key role in preparing the federal budget, reviewing agency proposals and formulating budgetary recommendations.
#14
During an economic boom, what fiscal policy measure is often implemented to cool down the economy?
Raising taxes
ExplanationRaising taxes is a fiscal policy measure often implemented during an economic boom to reduce excess demand and cool down the economy.