Fiscal Policy Concepts and Effects
Interactive Video
•
Business, Social Studies, Other
•
11th - 12th Grade
•
Practice Problem
•
Hard
Patricia Brown
FREE Resource
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10 questions
Show all answers
1.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is the primary goal of fiscal policy?
To manage foreign exchange rates
To control inflation
To influence aggregate demand
To regulate interest rates
2.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Which of the following is a reason for a government to use expansionary fiscal policy?
To reduce economic growth
To boost aggregate demand
To decrease inflation
To increase unemployment
3.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
How can expansionary fiscal policy affect unemployment?
It stabilizes unemployment
It reduces unemployment
It has no effect on unemployment
It increases unemployment
4.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is a key objective of contractionary fiscal policy?
To increase the budget deficit
To boost inflation
To reduce aggregate demand
To increase government spending
5.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
How does contractionary fiscal policy help in reducing a budget deficit?
By reducing government spending
By lowering interest rates
By increasing aggregate demand
By increasing government borrowing
6.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Which tax policy is an example of expansionary fiscal policy?
Reducing corporation tax
Increasing income tax
Introducing new tariffs
Raising VAT
7.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Why might a government reduce regressive taxes as part of expansionary fiscal policy?
To boost consumption among lower-income groups
To reduce government revenue
To decrease disposable income
To increase the tax burden on the poor
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