C4 : SET 3 - ROLE OF GOVERNMENT POLICY

Which of the following government policies will help the economy to recover during inflation?

• The selling of government securities in the open market

• The purchase of government securities in the open market

• A decrease in the discount rate

• A decrease in the discount rate

Government ensures the stability and economic growth of a country by the following except _____________________.

• Adjusting the allocation of resources to alter the composition of the domestic output

• Controlling unemployment and inflation, which are caused by business fluctuations

• Encouraging the power of monopoly firms

• Redistributing income and wealth among the population

A deficit budget occurs when ______________________.

• The government’s total expenditure exceeds revenue

• The government‟s total expenditure equals revenue

• Tax collection is more than government expenditure

• The public debt decreases

If the government‟s total revenues are more than its total expenditure, it is called a _________.

• Balanced budget

• Surplus budget

• Deficit budget

• Trade surplus

Which of the following are examples of indirect taxes in Malaysia?

• Income tax

• Land tax

• Sales tax

• Poll tax

All the following are examples of direct tax except ___________.

• Personal income tax

• Company tax

• Stamp duties

• Services tax

The objectives of the government taxation are as follows except _________.

• To increase inequality of income distribution between the rich and the poor

• To restrain the consumer from consuming unhealthy products

• To protect local and infant industries

• To increase government revenue

A progressive tax is a tax that __________________.

• Is imposed only on higher income earners

• Will be the same for all income levels

• Goes on increasing with income

• Falls with the increases in income

Government development expenditure consists of ____________________.

• Pension and gratuities

• Debts service charges

• Social services

• Subsidies

External sources of public borrowing are_______________________.

• Loans from the international money market

• Borrowing from financial institutions

• Loans from commercial banks

• Loans from the central bank