26 Lecture

Which of the following is not a source of government revenue? a) Income tax b) Sales tax c) Property tax d) All of the above are sources of government revenue Solution: d) All of the above are sources of government revenue

Which of the following is an example of an indirect tax? a) Income tax b) Property tax c) Sales tax d) None of the above Solution: c) Sales tax

What is the primary objective of fiscal policy? a) To maintain price stability b) To promote economic growth c) To achieve a balanced budget d) To reduce income inequality Solution: b) To promote economic growth

Which of the following is not a component of the budget? a) Revenues b) Expenditures c) Deficits d) All of the above are components of the budget Solution: d) All of the above are components of the budget

Which of the following is an example of a transfer payment? a) Social Security benefits b) Military spending c) Interest payments on government debt d) All of the above Solution: a) Social Security benefits

What is the difference between a budget deficit and a budget surplus? a) A budget deficit occurs when revenues exceed expenditures. b) A budget surplus occurs when revenues exceed expenditures. c) A budget deficit occurs when expenditures exceed revenues. d) A budget surplus occurs when expenditures exceed revenues. Solution: c) A budget deficit occurs when expenditures exceed revenues.

Which of the following is an example of an automatic stabilizer? a) Unemployment insurance b) Corporate tax cuts c) Military spending d) None of the above Solution: a) Unemployment insurance

What is the purpose of debt management? a) To reduce the national debt b) To minimize interest payments on the national debt c) To maximize interest payments on the national debt d) None of the above Solution: b) To minimize interest payments on the national debt

Which of the following is not a type of government expenditure? a) Transfer payments b) National defense c) Interest payments on government debt d) All of the above are types of government expenditure Solution: d) All of the above are types of government expenditure

What is the difference between a progressive tax and a regressive tax? a) A progressive tax takes a larger percentage of income from high-income earners than from low-income earners, while a regressive tax takes a larger percentage of income from low-income earners than from high-income earners. b) A progressive tax takes a larger percentage of income from low-income earners than from high-income earners, while a regressive tax takes a larger percentage of income from high-income earners than from low-income earners. c) A progressive tax takes a flat percentage of income from all earners, while a regressive tax takes a variable percentage of income based on income level. d) None of the above Solution: a) A progressive tax takes a larger percentage of income from high-income earners than from low-income earners, while a regressive tax takes a larger percentage of income from low-income earners than from high-income earners.

What is public finance, and why is it essential? Answer: Public finance refers to the management of financial resources by the government to meet public needs and achieve socio-economic objectives. It is essential because it plays a critical role in promoting economic growth, reducing poverty, and advancing social development.

What is the difference between direct and indirect taxes? Answer: Direct taxes are taxes paid directly to the government by individuals or entities, such as income tax or property tax. Indirect taxes are taxes paid indirectly through the purchase of goods or services, such as sales tax or excise tax.

What is fiscal policy, and what are its objectives? Answer: Fiscal policy refers to the use of government spending and taxation to influence the economy. Its objectives include promoting economic growth, maintaining price stability, reducing income inequality, and achieving a balanced budget.

What is a budget, and what are its components? Answer: A budget is a financial plan that outlines a government's revenues and expenditures. Its components include revenues, expenditures, and deficits or surpluses.

What are transfer payments, and what is their purpose? Answer: Transfer payments are payments made by the government to individuals or organizations without receiving anything in return, such as Social Security benefits. Their purpose is to provide a safety net for those in need and to reduce poverty.

What is the difference between a budget deficit and a budget surplus? Answer: A budget deficit occurs when government expenditures exceed revenues, while a budget surplus occurs when revenues exceed expenditures.

What are automatic stabilizers, and how do they work? Answer: Automatic stabilizers are government programs that automatically increase spending or decrease taxes during economic downturns and decrease spending or increase taxes during economic upturns. They work by stabilizing the economy during times of economic volatility.

What is debt management, and why is it important? Answer: Debt management refers to the management of government debt, including issuing and redeeming debt securities and managing interest payments. It is important because it helps to minimize the cost of government borrowing and reduces the risk of financial instability.

What are the different types of government expenditure? Answer: The different types of government expenditure include transfer payments, national defense, education, healthcare, infrastructure, and interest payments on government debt.

What is the difference between a progressive tax and a regressive tax? Answer: A progressive tax is a tax system where high-income earners pay a higher percentage of their income in taxes than low-income earners. In contrast, a regressive tax system is one where low-income earners pay a higher percentage of their income in taxes than high-income earners.