Offer insight into the way things work in the economy.
John M. Keynes is best known for advocating:
A policy of annually balancing the budget.
Deficit spending during some recessions.
Contractionary fiscal policy during a recession.
Expansionary fiscal policy during a boom.
Which of the following is the best example of an automatic stabilizer in fiscal policy?
Spending more on national highways.
Paying pensions to retired military personnel.
Paying unemployment insurance benefits.
Decreasing the supply of money.
All of the following are variables that can be manipulated to affect fiscal policy except:
Personal income taxes.
Government expenditures on goods and services.
Government expenditures on unemployment benefits.
The rate of interest.
Contractionary fiscal policy can involve:
Increasing consumption and investment and taxes.
Decreasing government spending and increasing taxes.
Increasing government spending and increasing taxes.
None of the above.
Changes in discretionary fiscal policy (e.g., taxes) and automatic stabilizers (e.g., unemployment insurance benefits) can have significant unintended effects on all of the following except:
The incentive to work.
The incentive to spend.
The incentive to save.
The incentive to purchase imported goods.
To help fight a recession, the government could:
Lower interest rates by decreasing the cash rate.
Decrease taxes to increase aggregate demand.
Conduct contractionary fiscal policy by raising taxes.
Decrease government spending to balance the budget.
The government’s Exchequer Borrowing Requirement is €540m, its Current Budget Deficit is €150m and Borrowing by State Sponsored Bodies is €180m. Calculate the General Government Deficit (GGD).
870
720
390
330
Countercyclical policy would suggest that a Government should introduce contractionary fiscal policy:
When an economy is expanding at a rapid rate and unsustainable pace.
When economy is in decline and economic activity is slow.
When economy has low or negative growth and high unemployment.
None of above.
The instruments of Fiscal Policy include:
Government Spending and interest rates.
Government expenditure and Government Revenue.
Direct taxes and Indirect taxes.
Government Spending and taxes.
In what year did Ireland exit the last Bailout Programme?
