Fiscal Policy and some general knowledge

The policy involving changes to government spending and tax

• monetary

• supply side

• fiscal

• externality

Fiscal policy is mostly used to influence levels of....

• supply

• demand

• trade

• interest rates

Fiscal policy is the use of government expenditure, ........ and government borrowing to affect income, spending, demand and inflation

A budget deficit means....

• government get more revenue than spending

• government get less revenue than they need to spend

• revenue is equal to spending

• imports are greater than exports

A government budget surplus is when....

• the government have no money to spend

• spending is greater than tax revenue

• tax revenue is greater than expenditure

• we have more income than we earn

An increase in tax levels should lead to.... (choose all that apply)

• increased spending

• less disposable income

• more imports being bought

• reduced inflation

An increase in government spending can boost the economy because.....(choose all that apply)

• jobs may be created

• there will be cuts in wages for workers

• public sector workers might earn more

• taxes will fall

The accumulated money that the government has borrowed over the years is called....

• compound borrowing

• accumulated borrowing

• taxation deficit

• national debt

Expansionary fiscal policy should lead to: (choose all that apply)

• economic growth

• reduced inflation

• cut backs in spending

• reduced unemployment

What will the government do in Expansionary/reflationary fiscal policy (choose 2)

• reduce tax

• increase spending

• increase tax

• reduce spending