Fiscal Policy refers to ?

Related Mcqs:

1. 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

2. 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

3. 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

4. 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

5. 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

6. 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

7. Which of the following is not involved with fiscal policy ?

   A. Income tax
   B. National insurance
   C. VAT
   D. Interest insurance

8. Expansionary fiscal policy in the classical model will cause aggregate demand to _______ potential output?

   A. exceeds
   B. fall below
   C. fluctuate around
   D. remain equal to

9. If a country’s policy makers were to continuously use expansionary monetary policy in an attempt to hold unemployment below the natural rate the long-run result would be ?

   A. an increase in the level of output
   B. a decrease in the unemployment rate
   C. an increase in the rate of inflation
   D. All of these answers

10. In the early eighties, the Federal Reserve pursed a tight monetary policy. All else being equal. the impact of that policy was to interest rates in the United States relative to those in Europe and cause the dollar to _______ against European currencies?

    A. decrease; depreciate
    B. decrease; appreciate
    C. increase; depreciate
    D. increase; appreciate