Which of the following is an example of expansionary fiscal policy?

Decreasing production of consumer goods

Who is responsible for making fiscal policy decisions in the government?

The National Council of Economic Advisors

The commerce department of the government

If the unemployment rate is rising and GDP was falling. What policy should the government most likely be willing to follow?

Decreasing the reserve requirement

Increasing production of the assets

Fiscal policy: Spending MCQ Quiz with answers

1.

Which of the following refers to the government's revenue, debt and spending?
- A.
  
  Legal Reserves
- B.
  
  Fiscal
- C.
  
  Government reserve system
- D.
  
  None of the above
Correct Answer
B. Fiscal

Explanation
Fiscal refers to the government's revenue, debt, and spending. It is a term used to describe the financial activities and policies of the government, including taxation, budgeting, and public expenditure. The fiscal policy plays a crucial role in managing the economy and ensuring the stability of the government's finances.

Rate this question:
2.

Which of the following is the central bank in the USA that regulates the monetary system?
- A.
  
  The FED
- B.
  
  IRS
- C.
  
  FDIC
- D.
  
  None of the above
Correct Answer
A. The FED

Explanation
The correct answer is The FED. The FED, also known as the Federal Reserve System, is the central bank of the United States. It is responsible for regulating the country's monetary system, controlling the money supply, and implementing monetary policy to promote economic stability and growth. The FED plays a crucial role in influencing interest rates, managing inflation, and supervising and regulating banks to maintain the stability of the financial system.

Rate this question:
3.

What kind of taxes increases as the income increases?
- A.
  
  Estate taxes
- B.
  
  Progressive taxes
- C.
  
  Property taxes
- D.
  
  None of the above
Correct Answer
B. Progressive taxes

Explanation
Progressive taxes increase as income increases. This means that as a person's income rises, the percentage of their income that is taxed also increases. This type of tax system is designed to be more equitable, as it places a greater burden on those with higher incomes. In contrast, estate taxes and property taxes are not directly tied to income and do not necessarily increase as income increases. Therefore, the correct answer is progressive taxes.

Rate this question:
4.

Which of the following is an example of expansionary fiscal policy?
- A.
  
  Increasing the taxes
- B.
  
  Decreasing production of consumer goods
- C.
  
  Cutting taxes
- D.
  
  None of the above
Correct Answer
C. Cutting taxes

Explanation
Cutting taxes is an example of expansionary fiscal policy because it involves reducing the tax burden on individuals and businesses. This policy aims to stimulate economic growth and increase aggregate demand by putting more money in the hands of consumers and encouraging businesses to invest and expand. By cutting taxes, the government hopes to boost spending, increase consumption, and ultimately stimulate economic activity.

Rate this question:
5.

Which of the following is NOT amongst the fiscal policy of the government?
- A.
  
  Taxes
- B.
  
  Interest Rates
- C.
  
  Spending
- D.
  
  None of the above
Correct Answer
B. Interest Rates

Explanation
Fiscal policy refers to the government's use of taxation, spending, and borrowing to influence the economy. Taxes and spending are both tools used by the government to implement fiscal policy. However, interest rates are not directly controlled by the government through fiscal policy. Instead, interest rates are typically controlled by the central bank through monetary policy. Therefore, interest rates are not considered a part of the fiscal policy of the government.

Rate this question:
6.

Which of the following is amongst the taxing and spending money?
- A.
  
  Budget policy
- B.
  
  Money policy
- C.
  
  Expansionary policy
- D.
  
  All of the above
Correct Answer
C. Expansionary policy

Explanation
Expansionary policy refers to a fiscal or monetary policy that aims to stimulate economic growth and increase aggregate demand. It involves increasing government spending and reducing taxes to boost consumer and business spending. This policy is considered as a form of taxing and spending money because it involves the government using its fiscal tools to influence the economy by either collecting more taxes or spending more money. Therefore, expansionary policy is amongst the taxing and spending money options listed.

Rate this question:
7.

Which of the following is amongst the fiscal policy that can help to reduce inflation in the country?
- A.
  
  More production of the good
- B.
  
  Open market sales
- C.
  
  Increasing taxation
- D.
  
  All of the above
Correct Answer
C. Increasing taxation

Explanation
Increasing taxation is a fiscal policy that can help to reduce inflation in the country. When the government increases taxes, it reduces the amount of disposable income available to consumers. This decrease in consumer spending helps to reduce the overall demand in the economy, which can help to lower inflationary pressures. Additionally, increased taxation can also lead to a decrease in the money supply, further reducing inflation. Therefore, increasing taxation is an effective fiscal policy tool to control inflation.

Rate this question:
8.

When the taxes are raised, which of the following gets out of circulation?
- A.
  
  Jobs
- B.
  
  Money
- C.
  
  Credit cards
- D.
  
  All of the above
Correct Answer
B. Money

Explanation
When taxes are raised, people have less disposable income, which means they have less money to spend. This leads to a decrease in the circulation of money as people are not able to spend as much. Therefore, the correct answer is money.

Rate this question:
9.

Who is responsible for making fiscal policy decisions in the government?
- A.
  
  The National Council of Economic Advisors
- B.
  
  The commerce department of the government
- C.
  
  The RBI
- D.
  
  The President and Congress
Correct Answer
D. The President and Congress

Explanation
The President and Congress are responsible for making fiscal policy decisions in the government. The President proposes the budget and presents it to Congress, which then reviews and approves it. Congress has the power to make changes to the budget and pass legislation related to fiscal policy. Together, the President and Congress work to determine how the government will spend and allocate funds, set tax policies, and make decisions that impact the overall economy.

Rate this question:
10.

If the unemployment rate is rising and GDP was falling. What policy should the government most likely be willing to follow?
- A.
  
  Decreasing the reserve requirement
- B.
  
  Increasing production of the assets
- C.
  
  Increasing taxes
- D.
  
  Decreasing taxes
Correct Answer
D. Decreasing taxes

Explanation
When the unemployment rate is rising and GDP is falling, it indicates a sluggish economy with reduced consumer spending and business activity. In this scenario, the government would most likely be willing to follow a policy of decreasing taxes. By reducing taxes, the government aims to stimulate economic growth by putting more money into the hands of consumers and businesses, encouraging spending and investment. This can lead to increased demand for goods and services, job creation, and ultimately help in reducing unemployment and boosting GDP.

Rate this question:

Fiscal policy: Spending MCQ Quiz with answers

Which of the following refers to the government's revenue, debt and spending?

Which of the following is the central bank in the USA that regulates the monetary system?

What kind of taxes increases as the income increases?

Which of the following is an example of expansionary fiscal policy?

Which of the following is NOT amongst the fiscal policy of the government?

Which of the following is amongst the taxing and spending money?

Which of the following is amongst the fiscal policy that can help to reduce inflation in the country?

When the taxes are raised, which of the following gets out of circulation?

Who is responsible for making fiscal policy decisions in the government?

If the unemployment rate is rising and GDP was falling. What policy should the government most likely be willing to follow?