4.7, 4.8

How can budget outcomes be most effectively compared in terms of economic impact?

• In absolute dollar terms

• As percentages of total government spending

• As percentages of GDP

• In terms of per capita values

Which of the following budget stances is typically used to stimulate economic activity?

• Balanced budget

• Contractionary budget

• Expansionary budget

• Structural surplus

What is a key effect of a contractionary budget stance?

• It increases aggregate demand.

• It raises inflation.

• It reduces economic activity.

• It lowers unemployment.

Automatic stabilisers are best described as:

• Government decisions to adjust tax rates

• Policies implemented by the central bank

• Economic mechanisms that operate without new policy actions

• Long-term capital investment strategies

Which of the following would occur automatically during a recession?

• Tax increases

• Reduced government spending

• Increased welfare outlays

• Interest rate hikes

During an economic boom, automatic stabilisers result in:

• Lower government surpluses

• Higher unemployment payments

• Increased tax revenues

• Decreased inflationary pressure from reduced revenue

Discretionary stabilisers differ from automatic stabilisers because they:

• Only operate during booms

• Require specific government policy actions

• Affect only business investment

• Cannot impact inflation

Which of the following was a discretionary measure during COVID-19?

• Increased interest rates

• The fuel excise cut

• Bracket creep

• Tax bracket revisions in 2024

What was the primary aim of the 2022 fuel excise cut?

• Reduce emissions

• Encourage public transport

• Offset rising global oil prices

• Increase government revenue

Which group primarily benefited from the $500 energy rebate?

• High-income earners

• Export businesses

• Low-income households

• State governments