Fiscal Policy Quiz

Fiscal policy is related to:

• Money supply and interest rates

• Government revenue and expenditure

• Balance of payments

• Export and import

The main objective of fiscal policy is to:

• Promote foreign trade

• Regulate stock markets

• Achieve economic stability and growth

• Control money supply

Which of the following is NOT a tool of fiscal policy?

• Taxation

• Public expenditure

• Open market operations

• Public debt

Fiscal policy in India is formulated by:

• Reserve Bank of India

• Ministry of Finance

• NITI Aayog

• Planning Commission

Increasing public expenditure and reducing taxes during recession is an example of:

• Contractionary fiscal policy

• Expansionary fiscal policy

• Neutral fiscal policy

• Balanced fiscal policy

Contractionary fiscal policy is used to:

• Boost demand in the economy

• Reduce inflation

• Increase public debt

• Raise employment

Which of the following would be used in an expansionary fiscal policy?

• Increase in taxes

• Decrease in government spending

• Increase in subsidies and transfer payments

• Increase in interest rates

A fiscal deficit occurs when:

• Exports exceed imports

• Government expenditure exceeds revenue

• Revenue exceeds expenditure

• Tax collection is higher than expected

Which one of the following is a revenue receipt for the government?

• Borrowing

• Sale of shares

• Tax revenue

• Disinvestment

The primary deficit is equal to:

• Fiscal deficit + interest payments

• Fiscal deficit – interest payments

• Revenue deficit – capital receipts

• Budget deficit – capital expenditure