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CA Foundation Economics: related Business Economics practice — page 6

The practice bank below covers broader Business Economics topics; a dedicated Economics lesson is not available yet.

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Business Economics questions and exercises with answers

Showing questions 151–180 of 245.

Which fiscal stance suits an economy in neither recession nor expansion?Read the answer and worked solution →Which fiscal stance is usually adopted during a recession?Read the answer and worked solution →Which measure is an example of expansionary fiscal policy?Read the answer and worked solution →Raising tax rates and cutting government spending is which stance?Read the answer and worked solution →When is contractionary fiscal policy typically employed?Read the answer and worked solution →Why are cyclically adjusted figures used to judge fiscal stance?Read the answer and worked solution →If revenue cannot cover bond interest, a nation may do what?Read the answer and worked solution →In developing economies, fiscal policy mainly aims to improve what?Read the answer and worked solution →What can a government do with a budget surplus when inflation is too high?Read the answer and worked solution →Keynesians say which pair of steps best raises aggregate demand?Read the answer and worked solution →Crowding out of private investment works through changes in what?Read the answer and worked solution →Under Ricardian equivalence, how do households react to a current deficit?Read the answer and worked solution →A negative government budget balance is called what?Read the answer and worked solution →In economics, the government deficit is what kind of variable?Read the answer and worked solution →Fiscal deficit equals the primary deficit plus what?Read the answer and worked solution →Extra borrowing needed at the low point of the business cycle is called what?Read the answer and worked solution →Which deficit remains across the whole business cycle?Read the answer and worked solution →Structural deficit is 3% of GDP and cyclical deficit 2%. Total deficit?Read the answer and worked solution →Most economists say a recession calls for the government to do what?Read the answer and worked solution →Which measure compares spending and revenues over the very long term?Read the answer and worked solution →The delay between a stimulus and its effects being felt is called what?Read the answer and worked solution →Interest rate cuts failing to lift demand describe which situation?Read the answer and worked solution →Which 1920 book by A.C. Pigou argued for taxing external harms?Read the answer and worked solution →A Pigovian tax is set equal to which quantity?Read the answer and worked solution →A tax equal to the externality shifts which curve upward?Read the answer and worked solution →A negative externality is the gap between social cost and which cost?Read the answer and worked solution →Which is the prototypical example of a negative externality?Read the answer and worked solution →With positive externalities, output of the good tends to be what?Read the answer and worked solution →Taxing producers so prices reflect full costs is called what?Read the answer and worked solution →The Coase theorem needs which condition on transaction costs?Read the answer and worked solution →

Worked practice questions

Which fiscal stance suits an economy in neither recession nor expansion?

  1. Neutral stance
  2. Protectionist
  3. Contractionary
  4. Expansionary
Show answer and solution

Correct answer: A. Neutral stance

With no recession or boom, deficit spending stays near its average, which is a neutral stance.

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Which fiscal stance is usually adopted during a recession?

  1. Expansionary
  2. Neutral stance
  3. Contractionary
  4. Protectionist
Show answer and solution

Correct answer: A. Expansionary

Spending beyond tax revenue helps counter the contraction phase of the business cycle.

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Which measure is an example of expansionary fiscal policy?

  1. Cuts in public works
  2. Higher excise duties
  3. Higher income tax rates
  4. Tax cuts for households
Show answer and solution

Correct answer: D. Tax cuts for households

Tax cuts raise purchasing power and so lift demand, as expansionary policy intends.

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How to practise

  1. Choose a Business Economics question and try to work out your answer.
  2. Open the question to check the correct answer and read its worked solution.
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More Business Economics topics

Price-Output Determination under Different Market FormsPublic FinanceSupplyLaw of DemandInternational TradeBasic Problems of an Economy and Role of Price MechanismProduction And CostBusiness Cycles