MACROECONOMICS (CHAPTER 4: ROLES OF GOVERNMENT POLICY)

1.       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 deceases

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?

• Petroleum income tax

                                            

• export   duties

                                     

• Sales tax

• Service tax

All of the following are examples of direct tax except________

• personal income tax

•   company tax

•   stamp duties

• services tax

The objectives of 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 increase in income

Government development expenditure consists of __________.

• pensions and gratuities

•   debt service charges

•      social services

•    subsidies

Government operating expenditure consists of

• pensions and gratuities

• agriculture and transport

• housing and medical

• communication and mineral resources

Compulsory contribution by an individual or a firm to the government to be used in the common interest of economy refers to

• Tax revenue

• Non tax revenue

• Non-revenue receipts

• Fixed tax