#1
Which of the following is NOT a tool of fiscal policy?
Taxation
Government spending
Monetary policy
Transfer payments
#2
What does expansionary fiscal policy aim to do?
Decrease government spending
Increase taxes
Reduce inflation
Boost economic growth
#3
What is the primary goal of government revenue?
To stimulate economic growth
To fund government expenditures
To control inflation
To regulate financial markets
#4
Which of the following is an example of direct taxation?
Sales tax
Corporate income tax
Excise tax
Value-added tax (VAT)
#5
Which of the following is an example of an indirect tax?
Property tax
Income tax
Value-added tax (VAT)
Corporate tax
#6
What does a contractionary fiscal policy aim to achieve?
Reduce unemployment
Stabilize prices
Boost consumer spending
Control inflation
#7
Which of the following is an example of an automatic stabilizer in fiscal policy?
Discretionary spending
Social Security benefits
Tax cuts
Infrastructure investments
#8
What is the Laffer Curve used to illustrate?
The relationship between inflation and unemployment
The effects of government regulation on the economy
The relationship between tax rates and government revenue
The impact of interest rates on investment
#9
What does the term 'progressive tax' mean?
Tax rates increase as income increases
Tax rates decrease as income increases
Tax rates remain constant regardless of income
Tax rates are higher for corporations than individuals
#10
Which of the following is NOT a source of government revenue?
Corporate taxes
Tariffs
Welfare payments
Property taxes
#11
Which of the following is a characteristic of a regressive tax?
Tax burden decreases as income increases
Tax burden increases as income increases
Tax rate is flat for all income levels
Tax rate decreases for low-income earners
#12
What is the main objective of a budget surplus?
To stimulate economic growth
To reduce government borrowing
To address income inequality
To encourage consumer spending
#13
Which of the following best describes a budget surplus?
Government spending exceeds government revenue
Government revenue exceeds government spending
Government borrows to cover expenses
Government increases taxes
#14
What is the main purpose of a budget deficit?
To reduce government debt
To encourage saving
To stimulate economic activity
To stabilize prices
#15
Which of the following best describes the 'debt-to-GDP ratio'?
The ratio of government debt to the total population
The ratio of government debt to national income
The ratio of government debt to foreign reserves
The ratio of government debt to inflation rate
#16
What is the primary drawback of using deficit spending as a fiscal policy tool?
Increased government debt
Lower inflation
Higher interest rates
Stabilization of the economy
#17
What effect does an increase in government spending typically have on the aggregate demand curve?
Shifts it leftward
Shifts it rightward
Does not affect it
Decreases the slope