Question Bank: Government Budget And The Economy

What is a balanced budget?

Which of the following describes a budget surplus?

What is a budget deficit?

Which measure indicates the excess of revenue expenditure over revenue receipts?

What does a fiscal deficit represent?

If a government has a cash surplus, it typically implies which of the following?

Which type of budget aims at reducing public debt?

What action is typically needed when a government has a budget deficit?

In which scenario would a government declare a balanced budget?

A significant revenue deficit might lead to what consequence?

Which budget type is most commonly utilized by governments worldwide?

The primary deficit is calculated by

Which of the following is a common measure of a government's financial health?

During a period of economic growth, which budget type might a government prefer?

What is a government budget primarily concerned with?

Which of the following is NOT a component of the government budget?

What type of budget occurs when government expenditures exceed revenues?

What is the primary purpose of the allocation function of the government budget?

Which document is required by Article 112 of the Indian Constitution?

Which of the following best describes public goods?

How does the government budget influence income distribution?

What distinguishes the revenue account from the capital account in the government budget?

Which of the following statements about a balanced budget is correct?

What term describes individuals who benefit from public goods without contributing to their cost?

Why is it challenging to supply public goods through the market mechanism?

Which type of budget supports economic growth by increasing government spending?

How do transfer payments in a government budget affect personal disposable income?

What happens to household income when the government raises taxes?

In which scenario would a government likely implement a surplus budget?

What is Ricardian equivalence?

What is a major criticism of running government deficits?

Which of the following is a method to reduce a government's fiscal deficit?

What is one potential effect of government borrowing on private investment?

What is a common misconception about public debt?

Which act in India aims at enforcing fiscal responsibility and budget management?

How can government spending lead to future economic growth?

What does a higher fiscal deficit generally indicate about government policy?

Which of the following could be an unintended consequence of deficit financing?

Which strategy can be used to enhance government revenue besides increasing taxes?

How does cutting government expenditure affect national income?

What is the potential impact of government borrowing from foreign investors?

Which of the following statements about government deficits is true?

Which component is NOT usually a part of fiscal policy aimed at deficit reduction?

What is the main effect of an increase in government spending on aggregate demand?

Which of the following is NOT a component of fiscal policy?

What does the government spending multiplier indicate?

If the marginal propensity to consume (MPC) is 0.8, what is the government spending multiplier?

Which budget type occurs when government expenditures exceed government revenues?

What effect does a decrease in taxes usually have on disposable income?

Which of the following best describes 'automatic stabilizers' in fiscal policy?

What is the primary objective of discretionary fiscal policy?

What happens to the consumption function when taxes are increased?

When the government runs a surplus budget, it means:

How can increased government spending combat a recession?

In a recession, which fiscal policy action is most likely to be effective?

Which of the following best describes the Ricardian equivalence theory?

A reduction in the proportional tax rate will likely:

What is meant by the term 'fiscal deficit'?