WorksheetsFiscal Policy Quiz II
Total questions: 12
Worksheet time: 6mins
What is the main objective of expansionary fiscal policy?
To increase government spending and decrease taxes
To decrease government spending and increase taxes
To maintain current levels of spending and taxes
To increase taxes and decrease government spending
What is a common tool used in contractionary fiscal policy?
Increasing government spending
Decreasing taxes
Increasing taxes
Increasing subsidies
What is the purpose of contractionary fiscal policy?
To stimulate economic growth
To reduce inflation
To increase employment
To increase consumer spending
Which fiscal policy type is used to slow down an overheating economy?
Expansionary fiscal policy
Contractionary fiscal policy
Neutral fiscal policy
Balanced fiscal policy
Which of the following is a goal of expansionary fiscal policy?
To reduce government debt
To increase inflation
To increase economic growth
To decrease consumer spending
What is the primary focus of DD-Mgmt Policies in macroeconomic policy?
Impact via AD
Impact via AS
Long Term EG
Factor Mobility
What is the effect of decreasing direct tax rates on the economy?
Decreases consumption, decrease investment
Increases consumption, increases investment
Increases investment, decrease consumption
Increases government revenue
What does the rightward shift of the AD curve from AD₀ to AD₁ indicate?
Decrease in national output
Increase in national output
Decrease in general price level
Increase in cyclical unemployment
What happens to real national income as a result of the multiplier process?
It decreases
It remains constant
It increases by multiples
It fluctuates randomly
What is the direct impact of a rise in government spending (G) on the economy?
It decreases aggregate demand (AD).
It has no effect on real national income.
It increases real national income and employment.
It causes inflation to rise immediately.
What could happen to tax cuts instead of being spent?
They could be invested in foreign markets.
They could be saved.
They could be used to pay off national debt.
They could be converted into gold.
When is contractionary fiscal policy typically used?
During periods of economic recession
During periods of excessive growth
When unemployment is high
When there is a budget deficit
