Monetary, Fiscal And Incomes Policy, And Inflation MCQs

Option A: I and II only

Option B: III and IV only

Option C: I, II and III only

Option D: I, II , III and IV

Correct Answer: I and II only ✔

Option A: I and II only

Option B: III and IV only

Option C: I, II and IV only

Option D: I, II and III only

Correct Answer: I, II and IV only ✔

Option A: I and II only

Option B: III and IV only

Option C: I, II and III only

Option D: I, II , III and IV

Correct Answer: I, II , III and IV ✔

Option A: adverse selection

Option B: moral hazard

Option C: social goods

Option D: hyperinflation

Correct Answer: adverse selection ✔

Option A: Taxes on international trade are the major source of tax revenue for low-income countries with poor administrative capacity

Option B: import duties can restrict luxury goods consumption

Option C: several LDCs have used value-added taxes to raise a substantial fraction of revenues

Option D: Cascade tax a form of progressive tax, is dominant in DCs

Correct Answer: Cascade tax a form of progressive tax, is dominant in DCs ✔

Option A: indirect taxes

Option B: direct taxes

Option C: inelastic

Option D: value-added tax

Correct Answer: direct taxes ✔

Option A: incomes policy

Option B: Moral hazard

Option C: Wagner’s law

Option D: Fiscal policy

Correct Answer: C. Wagner’s law ✔

Option A: demand pull inflation tax elasticity

Option B: interest rates, financial liberalization

Option C: interest rates, tax rates

Option D: tax rates, government spending

Correct Answer: tax rates, government spending ✔

Option A: demand for government spending on public goods goes due to lack of financial backup through tax collection

Option B: consumer business and government demand for goods and services in excess of an economy’s capacity to produce

Option C: a shortage of demand for goods and services in excess of supply during depression

Option D: demand for public goods is greater than demand for consumer goods

Correct Answer: B. consumer business and government demand for goods and services in excess of an economy’s capacity to produce ✔

Option A: ratchet inflation

Option B: inflationary expectations

Option C: import substitution

Option D: demand pull inflation

Correct Answer: ratchet inflation ✔

Option A: I and II only

Option B: III and IV only

Option C: I ,II and III only

Option D: I , II , III, and IV

Correct Answer: I , II , III, and IV ✔

Option A: I and II only

Option B: I and III only

Option C: III and IV only

Option D: I, II and III

Correct Answer: I and II only ✔

Option A: I and II only

Option B: III and IV only

Option C: I, II and III only

Option D: I, II, III, and IV

Correct Answer: I, II, III, and IV ✔

Option A: progressive

Option B: regressive

Option C: value added taxes (VAT)

Option D: excise taxes

Correct Answer: progressive ✔

Option A: are central banks

Option B: are branches of commercial banks

Option C: use fiscal policy to influence GDP

Option D: loan money to most of LDC commercial banks

Correct Answer: are central banks ✔

Option A: reserve, unemployment

Option B: money supply, interest rate

Option C: taxes, exchange rate

Option D: stock price, minimum wage

Correct Answer: money supply, interest rate ✔