A. Tax bands do not increase with inflation
B. Tax rates move inversely with inflation
C. Government spending falls to reduce aggregate demand
D. Tax banks increase with inflation
Related Mcqs:
- What is called the sequence of economic activity which is typically characterized by recession, fiscal recovery, growth and fiscal decline ?
A. Economic Cycle
B. Business Cycle
C. Complete Cycle
D. Cycle Business - Fiscal policy is weak under floating exchanges rates as fiscal expansion ?
A. crowds out imports
B. crowds out public consumption
C. crowds out exports
D. reduces the budget deficit - Fiscal Policy refers to ?
A. The government regulation of financial intermediaries
B. The spending and taxing policies used by the government to influence the economy
C. The actions of the central bank in controlling the money supply
D. The government’s attitude to taxation - Time lags which often erode effectiveness of monetary and fiscal policy measures represent ?
A. delays in the response of the economy is stabilization policy
B. the foreign response to price changes
C. the change in exports and imports prices
D. the change in exchange rates - A reflationary (expansionist) fiscal policy could include ?
A. Lower interest rates
B. Increased lending by the banks
C. An increase in corporation tax
D. An increase in discretionary government spending - Fiscal deficit in the budget means ?
A. Revenue deficit plus the net borrowings of the government
B. Budgetary deficits plus the net borrowings of the government
C. Capital deficit plus revenue deficit
D. Primary deficit minus capital deficit - fiscal incentives to attract businesses from abroad include ?
I- tax holidays
II- accelerated depreciation
III- import duty relief
IV- lower tax rates for reinvested business profitsA. I and II only
B. III and IV only
C. I, II and III only
D. I, II, III, and IV - By using fiscal policy, i (e) varying ______ and/or _____ governments achieve goals for output and employment growth as well as price stability?
A. demand pull inflation tax elasticity
B. interest rates, financial liberalization
C. interest rates, tax rates
D. tax rates, government spending - What is fiscal federalism ?
A. A fiscal system for a group of countries in which fiscal policy is set in a treaty signed by all the countries
B. A fiscal system for a group of countries in which government budget deficits are strictly limited
C. A fiscal system for a group of countries involving a common fiscal budget and a system of taxes and fiscal transfers across countries
D. A fiscal system in which fiscal policy is jointly determined by local and national politicians - Which of the following is a problem for fiscal policy in a currency union ?
A. The central bank controls interest rates on long-term bonds issued by the governments of the member countries of the currency union
B. Government of the member countries of the currency union may run large budget deficit and so crowd out private investment
C. government of the member countries of the currency union may run large budget deficits and so impose costs on other countries by pushing up interest rates on the bonds these countries governments issue
D. It is difficult to raise enough tax revenue to pay for the operation of the currency union
