#1
Which of the following is a tool of fiscal policy used by the government to stimulate economic activity?
Monetary policy
Interest rate manipulation
Taxation
Public expenditure
#2
What does fiscal policy primarily aim to influence within an economy?
Inflation rate
Unemployment rate
Money supply
Interest rates
#3
Which of the following is NOT a component of fiscal policy?
Taxation
Government spending
Interest rate manipulation
Transfer payments
#4
What is the term for the situation when government expenditures exceed revenues in a fiscal year?
Budget surplus
Fiscal responsibility
Deficit spending
Public debt
#5
What is the term for a situation where the government's total expenditures equal its total revenues?
Budget equilibrium
Fiscal neutrality
Balanced budget
Fiscal equilibrium
#6
Which of the following is a limitation of fiscal policy?
Flexibility
Speed of implementation
Effectiveness
Independence
#7
Which of the following is a contractionary fiscal policy measure?
Increasing government spending
Decreasing taxes
Increasing taxes
Reducing interest rates
#8
What is the term used for the difference between government expenditures and revenues in a given year?
Budget deficit
National debt
Budget surplus
Fiscal gap
#9
In fiscal policy, what does 'crowding out' refer to?
An increase in consumer spending
An increase in private investment
A decrease in government spending
A decrease in private investment due to increased government borrowing
#10
What is the primary objective of expansionary fiscal policy?
Stabilizing prices
Reducing inflation
Fighting unemployment
Balancing the budget
#11
In fiscal policy, what is the term for a decrease in government spending to control inflation?
Expansionary fiscal policy
Austerity measures
Automatic stabilizers
Crowding out effect
#12
What is the term used to describe a situation where the government's revenues exceed its expenditures in a fiscal year?
Budget deficit
Fiscal surplus
Public debt
Fiscal responsibility
#13
Which of the following is an example of an automatic stabilizer in fiscal policy?
Discretionary spending
Social security benefits
Infrastructure projects
Defense spending
#14
Which of the following is an example of discretionary fiscal policy?
Automatic stabilizers
Social welfare programs
Tax cuts during a recession
Entitlement spending
#15
Which of the following fiscal policy tools is used to increase aggregate demand during a recession?
Tax cuts
Reducing government spending
Raising interest rates
Austerity measures
#16
In fiscal policy, what is the term for the effect of government borrowing on interest rates and private investment?
Crowding out
Crowding in
Interest rate manipulation
Expansionary effect