macro:ROLE OF GOVERNMENT

What is the main function of the government in an economy?

• To provide entertainment

• To regulate and stabilize the economy

• To run all businesses

• To eliminate all taxes

Which type of budget occurs when government revenue is equal to expenditure?

• Deficit budget

• Surplus budget

• Balanced budget

• Unlimited budget

What is the main source of government revenue?

• Donations

• Loans from banks

• Taxation

• Selling government buildings

What is a direct tax?

• A tax that can be passed to another person

• A tax paid directly by individuals or businesses

• A tax only applied to imported goods

• A tax collected from shop owners

Which type of tax is included in the price of goods and services?

• Direct tax

• Indirect tax

• Income tax

• Wealth tax

What does a surplus budget mean?

• The government spends more than its revenue

• The government earns more than it spends

• The government has no money

• The government borrows money

Which of the following is a government expenditure?

• Buying new cars for private companies

• Paying salaries of government employees

• Giving money to business owners only

• Selling government assets

Which of the following is an internal source of public debt?

• Borrowing from foreign countries

• Loans from international banks

• Borrowing from citizens and financial institutions

• Getting donations from charities

Which policy is used by the government to manage taxes and spending?

• Trade policy

• Fiscal policy

• Industrial policy

• Immigration policy

What happens when the government increases taxes?

• People have more money to spend

• People have less money to spend

• Prices of goods become cheaper

• Government revenue decreases