10 Questions
Explain the rationale for the government to develop and implement macroeconomic policies, including the stabilisation of the economic cycle and the attainment of economic objectives.
The government develops and implements macroeconomic policies to stabilize the economic cycle and achieve economic objectives such as low inflation, low unemployment, and sustainable economic growth.
What is the difference between demand management and supply side policies?
Demand management policies focus on influencing aggregate demand through fiscal and monetary measures, while supply side policies aim to improve the productive capacity of the economy.
What are the limitations of demand management and supply side policies?
Limitations include time lags in policy effectiveness, global influences that may impact policy outcomes, and political constraints that can hinder policy implementation.
What are the sources of government income in the federal budget?
Government income includes direct and indirect taxation, revenue from government enterprises, and the sale of government assets.
What are the components of government expenditure in the federal budget?
Government expenditure consists of current spending, capital spending, and transfer payments.
Which of the following is NOT a source of government income in the federal budget?
Revenue from sale of government assets
Which of the following is NOT a component of government expenditure in the federal budget?
Interest payments
What is the role of automatic stabilizers in influencing aggregate demand and stabilizing the economic cycle?
They decrease government spending during economic downturns
What is the role of discretionary spending in influencing aggregate demand and stabilizing the economic cycle?
It increases government spending during economic downturns
What do demand management policies aim to achieve in terms of the economic cycle?
Stabilize the economic cycle
Test your knowledge on government macroeconomic policies and their rationale in this quiz. Learn about the importance of stabilizing the economic cycle and achieving various economic objectives. Differentiate between demand management and supply side policies, and explore their limitations including time lags, global influences, and political constraints. Get ready to master these crucial concepts!
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