#1
Which of the following is a tool of fiscal policy?
Interest Rates
Monetary Base
Government Spending
Foreign Exchange Rates
#2
What does expansionary fiscal policy aim to do?
Increase unemployment
Decrease inflation
Stimulate economic growth
Contract the money supply
#3
What is the primary objective of fiscal policy?
Stabilizing prices
Maximizing employment
Promoting economic growth
All of the above
#4
Which of the following is an example of an automatic stabilizer in fiscal policy?
Unemployment benefits
Discretionary spending
Corporate tax cuts
Infrastructure investments
#5
What is the primary tool of fiscal policy used by governments to influence the economy?
Interest rates
Taxation
Money supply
Exchange rates
#6
Which of the following is NOT a goal of fiscal policy?
Price stability
Full employment
Income redistribution
Foreign exchange rate stability
#7
Which of the following represents contractionary fiscal policy?
Increasing government spending and cutting taxes
Decreasing government spending and increasing taxes
Increasing government spending without any changes in taxes
Cutting taxes without any changes in government spending
#8
What is the crowding-out effect in fiscal policy?
Increased government spending crowds out private investment
Increased government spending boosts private investment
Decreased government spending boosts private investment
Decreased government spending crowds out private investment
#9
In fiscal policy, what does the term 'fiscal drag' refer to?
An increase in government spending
A decrease in government spending
A decrease in tax revenues due to economic downturns
An increase in tax revenues due to inflation
#10
What is the Ricardian equivalence proposition in fiscal policy?
Tax cuts will increase consumer spending
Government deficits will be fully offset by increased private savings
Government spending will always lead to economic growth
Lowering interest rates will stimulate investment
#11
What is the term for the situation when government spending exceeds revenue in a fiscal year?
Budget surplus
Budget deficit
National debt
Tax exemption
#12
Which of the following is an example of discretionary fiscal policy?
Social Security payments
Unemployment benefits
Defense spending increases during a war
Automatic stabilizers
#13
Which economic theory suggests that fiscal policy is less effective during recessions?
Supply-side economics
Monetarism
Keynesian economics
Classical economics
#14
According to fiscal policy theory, what is the potential downside of using expansionary policy during an economic boom?
Increased inflation
Decreased government debt
Higher unemployment
Decreased consumer spending
#15
In fiscal policy, what is the term for a simultaneous increase in government spending and taxes?
Expansionary fiscal policy
Contractionary fiscal policy
Stimulative fiscal policy
Neutral fiscal policy
#16
What is the term for the situation when government revenue equals spending in a fiscal year?
Budget surplus
Budget deficit
Fiscal equilibrium
National debt
#17
Which of the following economic theories suggests that fiscal policy should focus on minimizing government intervention in the economy?
Monetarism
Keynesian economics
Classical economics
Supply-side economics