Economics Chapter 8, 9 and 10

The area of greatest Federal Government expenditure is

• health
• educaiton
• defence
• social security and welfare

The largest source of Federal Government revenue is

• income tax
• sales tax
• company and resource rent taxes
• fuels excise

Contractionary, neutral and expansionary are:

• the three types of budget outcomes.
• the three possible fiscal policy stances.
• used to describe both budget outcomes and fiscal policy stances.
• not used to describe either budget outcomes or fiscal policy stances.

The best indicator of a budget’s short-term impact is:

• the budget outcome.
• the underlying cash balance.
• the fiscal balance.
• the fiscal balance as a percentage of GDP.

The taxation criteria proposed by Keynes, to judge whether a tax is a good tax or not, are:

• equity, efficiency and simplicity.
• fairness, efficiency and acceptability.
• equality, efficiency and acceptability.
• simplicity, efficiency and acceptability.

The time it takes for a fiscal policy measure to cause changes in the components of aggregate demand is known as:

• the implementation lag.
• the decision-making lag.
• the induced expenditure lag.
• the autonomous expenditure lag.

Which of the following types of time lags is an outside lag?

• the implementation lag
• the decision-making lag
• the induced expenditure lag
• the recognition lag

Which of the following is not an accurate statement about fiscal policy?

• It can include measures that initiate microeconomic reforms.
• Changes in taxation take effect quickly.
• The inside lag for fiscal policy is longer than it is for monetary policy.
• Changes to government spending begin as soon as the budget is handed down.

The policy response of the Australian Government to the onset of the GFC was:

• a discretionary fiscal stimulus.
• a discretionary fiscal contraction.
• a non-discretionary fiscal stimulus.
• a non-discretionary fiscal contraction.

The idea that active, discretionary government intervention via fiscal (or monetary) policy is the source of macroeconomic instability is associated with:

• conservative governments.
• monetarist economic theories.
• Keynesian economic theories.
• Adam Smith.