UD7 - EXAM

Which of the following expenses is considered current within the General State Budgets:

• Salary of military personnel
• Spending on highways
• Payment to the unemployed
• Aid to a productive sector

Indicate which of the following statements is correct:

• The deficit can be financed by issuing public debt
• Treasury bonds are a way to improve the public surplus
• Fiscal policies have no effect on the country's budget balance
• Structural deficit is transient and depends on the economic cycle

Indicate which of the following statements is FALSE:

• Expansive fiscal policy always causes excessively high and uncontrollable inflation
• An expansionary fiscal policy can cause undesired inflation and increase the public deficit
• A restrictive fiscal policy mitigates economic recessions and stimulates economic activity
• A restrictive fiscal policy can increase unemployment and reduce economic activity to undesirable levels, leading to deflation

The restrictive fiscal policy is based on:

• Decreasing public spending and increasing taxes
• Increasing taxes and public spending
• Decreasing taxes and public spending
• A policy contrary to economic activity

Which of the following measures of fiscal policy is NOT expansive:

• Turning a progressive tax into a proportional one, collecting the same
• Hiring more civil servants
• Increasing spending on public works
• Decreasing taxes on business profits

Public spending on improving highways is:

• An investment expense
• A subsidy expense
• A current expense
• A transfer expense

Within other income of the General State Budgets, we do NOT find:

• Social contributions
• Funds from the EU
• Revenue resulting from the sale of goods owned by the State
• Income generated by State assets, such as profits from public companies

Which types of policy are still in the hands of the individual Governments of each country in the EU?

• None of the above
• Fiscal and monetary policy
• Labour and foreign policy
• Monetary and foreign policy

An expansive fiscal policy:

• Stimulates the consumption and investment of citizens and generates inflation
• Stimulates the consumption and investment of citizens and always generates inflation
• Discourages the consumption and investment of citizens and generates inflation
• Discourages the consumption and investment of citizens and generates unemployment

The Laffer Curve relies on the idea that:

• It should be noted that raising taxes does not necessarily result in more revenue
• It is advisable to increase taxes as much as possible to collect the maximum
• It is advisable to decrease taxes as much as possible to collect the maximum
• It cannot be applied to the Spanish State