Category: Fiscal And Monetary Policy

A. Lower interest rates
B. Increased lending by the banks
C. An increase in corporation tax
D. An increase in discretionary government spending

A. The government’s budget position should automatically improve
B. The government’s budget position should automatically worsen
C. This will have no effect on the government’s budget position
D. This will reduce the government’s tax revenue

A. taxes paid by firms and households to the government minus the cost of collecting the taxes
B. Taxes paid firms and households to the government minus the transfer payments made to firms and household
C. Taxes paid by firms and households to the government plus transfer payments made to firm and households
D. government expenditures minus government revenues

A. Discourage consumption of positive externalities
B. Discourage consumption of public goods
C. Discourage consumption of merit goods
D. Discourage consumption of negative externalities

A. making banks keep a certain % of their assets as M0
B. controlling the money multiplier
C. restricting the amount of cash in circulation
D. not allowing commercial banks to issue notes and coins

A. debt burden
B. the Laffer curves
C. bracket creep
D. fiscal drag

A. reduce the minimum reserve asset ratio.
B. buy government securities on the open market
C. lower interest rates
D. sell government securities on the open market

A. credit rationing
B. government borrowing drives up interest rates
C. Bank of England controls on commercial bank lending
D. what the government borrows cannot be used for private investment

A. increase: increase
B. decrease; decrease
C. increase; decrease
D. decrease; increase

A. bad money drives out good
B. monetary policy can only be effective if it is a long-term policy
C. controlling one part of the money supply will merely result in that item becoming less important
D. the money supply must only expand at the rate of growth of real national income