Test Your Knowledge on Fiscal Policy (2)

Test Your Knowledge on Fiscal Policy (2)

This quiz will assess your understanding of fiscal policy, including government spending and taxation.

published on September 23
1/11

What is fiscal policy?

What is fiscal policy?
Government policies related to trade
Government policies related to public spending and taxation
Government policies related to monetary regulation
2/11

Which of the following is an expansionary fiscal policy measure?

Which of the following is an expansionary fiscal policy measure?
Decreasing government spending
Increasing taxes
Increasing government spending
3/11

What does contractionary fiscal policy aim to do?

What does contractionary fiscal policy aim to do?
Decrease inflation
Stimulate economic growth
Increase government debt
4/11

Which government body is responsible for implementing fiscal policy in the US?

Which government body is responsible for implementing fiscal policy in the US?
The Federal Reserve
The Department of Commerce
The Congress
5/11

What is the main goal of fiscal policy?

What is the main goal of fiscal policy?
Maximize profits for corporations
Stabilize the economy
Reduce household income
6/11

Which of the following is an example of an automatic stabilizer in fiscal policy?

Which of the following is an example of an automatic stabilizer in fiscal policy?
Unemployment benefits
Corporate tax cuts
Defense spending increases
7/11

What is the purpose of discretionary fiscal policy?

What is the purpose of discretionary fiscal policy?
To automatically adjust taxes based on economic conditions
To give policymakers flexibility to respond to economic challenges
To limit government intervention in the economy
8/11

Which of the following is a potential downside of expansionary fiscal policy?

Which of the following is a potential downside of expansionary fiscal policy?
Increased government revenue
Rising national debt
Stable inflation rates
9/11

What is the purpose of fiscal multipliers in economic analysis?

What is the purpose of fiscal multipliers in economic analysis?
To measure the effectiveness of monetary policy
To estimate the impact of fiscal policy changes on the economy
To calculate exchange rates
10/11

Which of the following is an example of a fiscal stimulus measure?

Which of the following is an example of a fiscal stimulus measure?
Cutting social welfare programs
Increasing infrastructure spending
Implementing austerity measures
11/11

How can fiscal policy be used to address a recession?

How can fiscal policy be used to address a recession?
Increasing government spending and cutting taxes
Decreasing government spending and raising taxes
Implementing strict trade regulations