Government Functions and Fiscal Policies Quiz
Test your knowledge on public finance with questions about government functions, fiscal policies, and economic tools.
#1
Which of the following is NOT a function of government?
Maintaining law and order
Providing public goods
Maximizing profits
Redistribution of wealth
#2
What is the primary tool used by governments to influence the economy?
Monetary policy
Fiscal policy
Supply-side economics
Keynesian economics
#3
Which of the following is NOT a component of government spending?
Defense expenditures
Transfer payments
Interest payments on debt
Tax revenues
#4
What is the term for the total value of all goods and services produced within a country's borders in a given period?
Gross National Product (GNP)
Gross Domestic Product (GDP)
Net Domestic Product (NDP)
National Income (NI)
#5
Which of the following is an example of expansionary fiscal policy?
Decreasing government spending
Decreasing taxes
Increasing interest rates
Increasing government spending
#6
What is the name for the difference between government revenue and government spending?
National debt
Budget deficit
Fiscal surplus
Monetary gap
#7
What is the main goal of contractionary fiscal policy?
To increase unemployment
To stimulate economic growth
To reduce inflation
To increase government spending
#8
Which of the following is a characteristic of a regressive tax?
Tax rate decreases as income increases
Tax rate increases as income increases
Tax rate is the same for all income levels
Tax rate is higher for lower-income individuals
#9
Which of the following is a characteristic of an automatic stabilizer in fiscal policy?
Requires legislative action to take effect
Operates with a time lag
Adjusts automatically in response to economic conditions
Tends to exacerbate economic fluctuations
#10
Which of the following is an example of an automatic stabilizer in fiscal policy?
Unemployment insurance
Corporate tax cuts
Infrastructure spending
Discretionary spending
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