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Questions and Answers
What is the primary goal of fiscal policy?
What is the primary goal of fiscal policy?
- To reduce budget deficits
- To reduce government spending
- To increase tax revenues
- To achieve full employment or price stability (correct)
What type of gap exists when real GDP is less than potential GDP?
What type of gap exists when real GDP is less than potential GDP?
- Fiscal gap
- Inflationary gap
- Economic gap
- Recessionary gap (correct)
What is the cure for an inflationary gap?
What is the cure for an inflationary gap?
- Contractionary fiscal policy (correct)
- Supply-side policy
- Monetary policy
- Expansionary fiscal policy
What is the result when government spending is more than tax revenues?
What is the result when government spending is more than tax revenues?
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What is a challenge in implementing fiscal policy?
What is a challenge in implementing fiscal policy?
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What is the opposite of a budget deficit?
What is the opposite of a budget deficit?
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