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Questions and Answers
In economics and political science, fiscal policy is the use of government revenue collection (taxes or tax cuts) and expenditure to influence a country's economy.
True
The use of government revenue expenditures to influence macroeconomic variables developed in reaction to the Great Depression of the 1930s.
True
Fiscal policy is based on the theories of the British economist Adam Smith.
False
Fiscal and monetary policy are the key strategies used by a country's government and central bank to advance its economic objectives.
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In modern economies, inflation is conventionally considered 'healthy' in the range of 5%–6%.
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Study Notes
Fiscal Policy
- Fiscal policy is the use of government revenue collection (taxes or tax cuts) and expenditure to influence a country's economy.
- The use of government revenue expenditures to influence macroeconomic variables developed in reaction to the Great Depression of the 1930s.
Foundational Theories
- Fiscal policy is based on the theories of the British economist Adam Smith.
Government Strategies
- Fiscal and monetary policy are the key strategies used by a country's government and central bank to advance its economic objectives.
Macroeconomic Objectives
- In modern economies, inflation is conventionally considered 'healthy' in the range of 5%–6%.
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Description
Test your knowledge of fiscal policy in economics and political science with this quiz. Explore the use of government revenue collection and expenditure to influence a country's economy and learn about its development in response to the Great Depression.
