#1
Which of the following is a tool of fiscal policy?
Monetary policy
Interest rates
Government spending
Exchange rates
#2
What is the main objective of fiscal policy?
Stabilizing prices
Maximizing profits
Reducing unemployment
Minimizing government debt
#3
What is the term for the period over which a government plans its budget?
Fiscal year
Calendar year
Budgetary period
Monetary cycle
#4
In Keynesian economics, during a recession, what is the recommended fiscal policy action by the government?
Increase taxes
Decrease government spending
Implement contractionary fiscal policy
Increase government spending
#5
What is the primary tool used by the government to finance budget deficits?
Issuing bonds
Increasing taxes
Printing money
Reducing government spending
#6
What is the term for the total amount of outstanding government debt?
Gross domestic product (GDP)
Fiscal deficit
National debt
Budget surplus
#7
What is the term for a situation where government spending exceeds government revenue?
Budget deficit
Budget surplus
Fiscal equilibrium
Fiscal consolidation
#8
What does the Laffer curve illustrate in fiscal policy?
The relationship between inflation and unemployment
The impact of government spending on economic growth
The relationship between tax rates and government revenue
The effect of interest rates on investment
#9
Which of the following is NOT a component of government revenue?
Corporate income taxes
Excise taxes
Social security contributions
Unemployment benefits
#10
Which of the following is a discretionary fiscal policy tool?
Automatic stabilizers
Progressive taxation
Government subsidies
Unemployment insurance
#11
What is the purpose of counter-cyclical fiscal policy?
To exacerbate economic downturns
To stabilize the economy over the business cycle
To maximize government debt
To reduce consumer spending
#12
Which of the following is an example of expansionary fiscal policy?
Increasing taxes during an economic boom
Reducing government spending during a recession
Decreasing interest rates during inflation
Increasing government spending during a recession
#13
Which of the following represents an automatic stabilizer in fiscal policy?
A tax rebate provided during a recession
A one-time infrastructure spending program
An increase in defense spending during times of peace
A reduction in social welfare benefits
#14
What is the crowding out effect in fiscal policy?
Increased government spending leads to lower private investment
Decreased government spending leads to higher private investment
Tax cuts stimulate economic growth
Government budget surplus stimulates consumer spending