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Questions and Answers
What was the primary reason for the Tunisian government to implement contractionary fiscal policy in 1986?
What was the primary reason for the Tunisian government to implement contractionary fiscal policy in 1986?
What was the rate of growth of government expenditures in Tunisia prior to 1986?
What was the rate of growth of government expenditures in Tunisia prior to 1986?
What was one of the measures taken by the Tunisian government to reduce its budget deficit?
What was one of the measures taken by the Tunisian government to reduce its budget deficit?
What was the duration of the Tunisian government's fiscal policy aimed at reducing the budget deficit?
What was the duration of the Tunisian government's fiscal policy aimed at reducing the budget deficit?
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What is the expected outcome of the ongoing reforms in Tunisia?
What is the expected outcome of the ongoing reforms in Tunisia?
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What is the main goal of reducing subsidies in Tunisia?
What is the main goal of reducing subsidies in Tunisia?
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Which of the following sectors did not experience a reduction in subsidies?
Which of the following sectors did not experience a reduction in subsidies?
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What is the focus of the reforms in terms of pricing?
What is the focus of the reforms in terms of pricing?
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What is the implication of the reduction in subsidies in Tunisia?
What is the implication of the reduction in subsidies in Tunisia?
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Study Notes
Tunisian Macro Policies
Fiscal Policy
- In 1986, the Tunisian government's budget deficit exceeded 11% of GDP.
- To reduce the deficit, the government applied a contractionary fiscal policy.
- Government expenditures had been growing rapidly, at a rate much faster than GDP, for three years (1986-1988).
- Measures taken to reduce the deficit included:
- Reducing public investment.
- Tightening social expenditure.
- Prohibiting government job creation.
Monetary Policy
- (No information provided)
Domestic Trade and Pricing in Tunisia
- Price control was previously the general rule in Tunisia, with free pricing being the exception.
- Ongoing reforms aim to reverse this, allowing prices to be determined by free competition.
- The primary goal is to focus on the effect of prices on income distribution.
- Subsidies are considered distorting and burdensome for the government, and are to be reduced or eliminated if possible.
- Subsidies have been reduced in the following areas:
- Public transportation
- Electricity
- Water
- Agriculture inputs
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Description
This quiz assesses your understanding of Tunisia's macroeconomic policies, specifically the government's efforts to reduce its budget deficit through fiscal policy measures between 1986-1988.
