Question 1
What is meant by current spending?
A.
Accumulation of past deficits. B.
Benefits and pensions — not in GDP directly. C.
Wages, drugs, day-to-day services. D.
Public sector spending on goods and services.
Question 2
Automatic stabilisers include:
A.
Only monetary policy B.
Trade quotas C.
Progressive taxes and unemployment benefits D.
Fixed per-capita taxes only
Question 3
What is meant by expansionary fiscal policy?
A.
Accumulation of past deficits. B.
Wages, drugs, day-to-day services. C.
Government spending exceeds tax revenue. D.
Raise G and/or cut taxes → AD right.
Question 4
Expansionary fiscal policy:
A.
Reduces AD always B.
Increases AD C.
Shifts LRAS left only D.
Eliminates imports
Question 5
What is meant by fiscal policy?
A.
Use of G and taxation to influence AD. B.
Government spending exceeds tax revenue. C.
Public sector spending on goods and services. D.
Infrastructure, new hospitals, equipment.
Question 6
Transfer payments are:
A.
Not included directly in GDP B.
Exports C.
The largest part of AD always D.
Only capital spending
Question 7
What is meant by contractionary fiscal policy?
A.
Accumulation of past deficits. B.
Raise G and/or cut taxes → AD right. C.
Infrastructure, new hospitals, equipment. D.
Cut G and/or raise taxes → AD left.
Question 8
A budget deficit occurs when:
A.
Unemployment is zero B.
Inflation is 0% C.
Spending exceeds tax revenue D.
Exports exceed imports
Question 9
What is meant by government spending (g)?
A.
Public sector spending on goods and services. B.
Government spending exceeds tax revenue. C.
Infrastructure, new hospitals, equipment. D.
Raise G and/or cut taxes → AD right.
Question 10
What is meant by national debt?
A.
Accumulation of past deficits. B.
Taxes and benefits that stabilise AD without new policy. C.
Raise G and/or cut taxes → AD right. D.
Government spending exceeds tax revenue.
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