OCR GCSE Economics - 3.5 - Fiscal Policy

Which is the correct definition of fiscal policy:

• A policy that aims to control the total supply of money in an economy to try and achieve the government’s economic objectives

• A government policy affecting the amount of supply in an economy

• A policy that uses government spending and taxation to affect the economy as a whole

• Laws to control the way people and organisations behave

What is the main source of government spending?

• Education

• Social protection

• Health

• Defence

‘A tax on income and wealth’ is describing indirect tax

• True

• False

What is the definition of a budget surplus?

• When tax revenue is greater than government spending

• When government spending is greater than tax revenue

• The source of finance for government spending

• A tax on spending, on goods/services

Which of these is not a government objective that fiscal policy is used to achieve?

• A balance in the balance of payments

• Price stability

• Low unemployment

• Income and wealth distribution

An increase in government spending and a reduction in tax is likely to lead to a budget deficit. True or false?

• True

• False

Fiscal policy can be used to achieve economic growth by:

• Increasing government spending and increasing tax

• Increasing government spending and decreasing tax

• Decreasing government spending and increasing tax

• Decreasing government spending and decreasing tax

Fiscal policy can be used to achieve low unemployment by:

• Increasing government spending and increasing tax

• Increasing government spending and decreasing tax

• Decreasing government spending and increasing tax

• Decreasing government spending and decreasing tax

Fiscal policy can be used to achieve price stability by:

• Increasing government spending and increasing tax

• Increasing government spending and decreasing tax

• Decreasing government spending and increasing tax

• Decreasing government spending and decreasing tax

Fiscal policy can be used to create a healthier balance of payments by:

• Increasing government spending and increasing tax

• Increasing government spending and decreasing tax

• Decreasing government spending and increasing tax

• Decreasing government spending and decreasing tax