#1
What is the primary objective of government fiscal policy?
To stabilize prices
To regulate interest rates
To promote economic growth and stability
To control money supply
#2
Which of the following is an expansionary fiscal policy measure?
Increasing taxes
Decreasing government spending
Decreasing transfer payments
Increasing government spending
#3
Which of the following is NOT a tool of fiscal policy?
Taxation
Government spending
Monetary policy
Transfer payments
#4
What is the term used to describe the portion of government revenue collected from individuals and businesses based on their income?
Sales tax
Property tax
Income tax
Excise tax
#5
Which of the following is a contractionary fiscal policy measure?
Decreasing taxes
Increasing government spending
Increasing transfer payments
Decreasing government spending
#6
Which of the following is a tool of expansionary fiscal policy?
Increasing taxes
Reducing government spending
Increasing transfer payments
Decreasing money supply
#7
What is the term used to describe a situation where government spending exceeds revenue?
Budget surplus
Budget deficit
Fiscal equilibrium
Fiscal neutrality
#8
Which of the following is a drawback of using fiscal policy to stabilize the economy?
Time lags
Immediate impact
Precise targeting
Predictable outcomes
#9
What is the name for the principle that suggests government spending should be used to offset fluctuations in private sector demand?
Ricardian equivalence
Supply-side economics
Automatic stabilizers
Keynesian economics
#10
In which phase of the business cycle would contractionary fiscal policy be most appropriate?
Expansion
Peak
Trough
Recession
#11
During periods of high inflation, what fiscal policy measure might the government implement to combat it?
Expansionary fiscal policy
Contractionary fiscal policy
Monetary policy
Neutral fiscal policy
#12
Which of the following statements is true about automatic stabilizers?
They require legislative action to be implemented
They tend to exacerbate economic fluctuations
They are designed to offset changes in economic activity without explicit government action
They are only effective during periods of economic expansion
#13
What is the name for the type of fiscal policy that seeks to balance the government's budget over the business cycle?
Counter-cyclical fiscal policy
Pro-cyclical fiscal policy
Neutral fiscal policy
Expansionary fiscal policy
#14
What is the term for the situation where government revenue equals government spending?
Budget surplus
Budget deficit
Budget balance
Fiscal equilibrium
#15
Which of the following is an example of discretionary fiscal policy?
Unemployment benefits automatically increasing during a recession
An across-the-board cut in income taxes
The Federal Reserve adjusting interest rates
Automatic increases in Social Security payments
#16
What is the name for the concept that suggests individuals may adjust their behavior in response to changes in fiscal policy, potentially offsetting its intended effects?
Crowding out
Ricardian equivalence
Laffer curve
Multiplier effect
#17
Which of the following is an example of an automatic stabilizer?
Government bailout programs
Unemployment insurance
Discretionary fiscal policy
Infrastructure spending
#18
Which of the following fiscal policy measures might be appropriate during an economic boom?
Increasing government spending
Decreasing transfer payments
Increasing taxes
Decreasing interest rates