Understanding Fiscal Finances: Government Budgets and Deficit Measurements

What is the primary focus of fiscal finances?

• International trade balances

• Personal savings and investments

• Corporate profits and losses

• Government budgets and deficit measurements

What does a government budget primarily detail?

• The government's plan for international aid

• The government's plan for income and expenditure

• The government's plan for education reform

• The government's plan for military spending

What condition describes a budget where taxes equal spending?

• Balanced budget

• Fiscal imbalance

• Budget deficit

• Budget surplus

In 2014-2015, what was the UK government's spending compared to its revenue?

• Spending was less than revenue

• Spending was equal to revenue

• Spending exceeded revenue

• Spending was not recorded

How much did the UK government need to borrow in 2014-2015 to cover its deficit?

• £50 billion

• £84 billion

• £100 billion

• £120 billion

What is the annual deficit?

• The amount of money saved by the government

• The total revenue collected by the government

• The amount by which government spending exceeds revenue in a year

• The total amount of money the government owes

How is the national debt different from the annual deficit?

• It is not related to government spending

• It is a measure of economic growth

• It is the total accumulated debt

• It is a yearly measure

What is a structural deficit?

• A deficit that automatically corrects over time

• A deficit unrelated to the economic cycle

• A surplus in government finances

• A deficit caused by temporary economic downturns

What typically happens to cyclical deficits during economic downturns?

• They expand

• They turn into surpluses

• They remain constant

• They decrease

Why is it important to address the structural deficit?

• It is unrelated to government policy

• It is a minor aspect of fiscal policy

• It ensures fiscal stability when the economic cycle turns

• It automatically corrects over time