Fiscal Policy review

Front

Which of the following is NOT a primary source of federal revenue for the US government? Income taxes, Corporate taxes, Sales taxes, Payroll taxes

Back

Sales taxes

Front

In the US tax system, which of the following taxes is typically considered progressive? Options: Income tax, Sales tax, Payroll tax, Corporate tax

Back

Income tax

Front

Which of the following would be an argument used to support the progressive tax structure in the US? It ensures everyone pays the same amount of tax., It simplifies the tax filing process., It reduces the burden on low-income earners., It encourages savings and investment among high-income earners.

Back

It reduces the burden on low-income earners.

Front

Which of the following is a significant factor contributing to the growth of the US national debt? Decreasing interest rates, Increasing federal budget surpluses, Persistent budget deficits, Decreasing healthcare costs

Back

Persistent budget deficits

Front

The annual shortfall in government revenues compared to government spending is called what?

Back

Deficit

Front

What is the primary difference between discretionary spending and mandatory spending in the US federal budget?

Back

Discretionary spending is determined annually through the appropriations process, while mandatory spending is set by existing laws.

Front

What is “crowding out” in the context of fiscal policy?

Back

The reduction in private investment due to increased government borrowing and spending

Front

Which of the following is a potential downside of using fiscal policy during an economic downturn? Increasing unemployment, Crowding out private investment, Reducing inflation, Decreasing consumer confidence

Back

Crowding out private investment

Front

Which of the following is an example of a supply shock? An unexpected drop in consumer spending, A natural disaster that disrupts production, An increase in government spending, A sudden change in tax policy

Back

A natural disaster that disrupts production

Front

Which of the following best defines fiscal policy?

Back

The use of government spending and tax policies to influence economic conditions