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WorksheetsFiscal Policy Quiz
Total questions: 15
Worksheet time: 8mins
Fiscal policy is related to:
Money supply and interest rates
Government revenue and expenditure
Balance of payments
Export and import
The main objective of fiscal policy is to:
Promote foreign trade
Regulate stock markets
Achieve economic stability and growth
Control money supply
Which of the following is NOT a tool of fiscal policy?
Taxation
Public expenditure
Open market operations
Public debt
Fiscal policy in India is formulated by:
Reserve Bank of India
Ministry of Finance
NITI Aayog
Planning Commission
Increasing public expenditure and reducing taxes during recession is an example of:
Contractionary fiscal policy
Expansionary fiscal policy
Neutral fiscal policy
Balanced fiscal policy
Contractionary fiscal policy is used to:
Boost demand in the economy
Reduce inflation
Increase public debt
Raise employment
Which of the following would be used in an expansionary fiscal policy?
Increase in taxes
Decrease in government spending
Increase in subsidies and transfer payments
Increase in interest rates
A fiscal deficit occurs when:
Exports exceed imports
Government expenditure exceeds revenue
Revenue exceeds expenditure
Tax collection is higher than expected
Which one of the following is a revenue receipt for the government?
Borrowing
Sale of shares
Tax revenue
Disinvestment
The primary deficit is equal to:
Fiscal deficit + interest payments
Fiscal deficit – interest payments
Revenue deficit – capital receipts
Budget deficit – capital expenditure
Which of the following is NOT an objective of fiscal policy?
Price stability
Full employment
Exchange rate control
Economic growth
An increase in government borrowing generally leads to:
Decrease in interest rates
Increase in private investment
Crowding out of private investment
Fall in public expenditure
Capital expenditure includes:
Interest payments
Wages and salaries
Purchase of machinery
Subsidies
Revenue deficit indicates:
Government’s inability to finance capital expenditure
Excess of revenue expenditure over revenue receipts
Fiscal deficit minus primary deficit
Excess of total expenditure over total receipts
Which of the following best describes fiscal policy?
Management of interest rates
Regulation of money supply
Use of government spending and taxation to influence the economy
Determination of exchange rate
