IGCSE Economics Fiscal Policy

Budget is the relationship between ___________ and ___________ .

• government revenue and government spending

• company profit and company loss

• company assets and company liabilities

• government tax and interest rate

When government spending is higher than government revenue, it is called ___________ .

• Direct tax

• Budget surplus

• Budget deficit

• Indirect tax

Aggregate Demand =

The reasons for government spending:

• To influence economic activity

• To raise interest rate

• To reduce market failure

• To promote equity

• To pay interest on national debt

Takes higher percentage of income/wealth of the rich :

• Progressive tax
• Regressive tax
• Proportional tax
• Excise tax

Takes same percentage of income/wealth of all tax payers :

• Progressive tax
• Regressive tax
• Proportional tax
• Excise tax

Among the following answers, which is NOT the example of direct tax?

• Income Tax
• Corporate Tax
• Inheritance Tax

• Value-Added Tax

The diagram shows a(an) ___________ fiscal policy.

Government plans to reduce inflation rate, they should use ___________ policy.

• expansionary fiscal

• contractionary fiscal

• supply-side policy

• expansionary monetary

Among the following options, which is NOT the impact of taxation:

• Redistribution of wealth
• Funding public services
• Stimulating economic growth
• Increasing personal savings