The Role of the State in the Macroeconomy (Edexcel A-Level Economics A): Quizzes
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Practise the questions
10 questions from this quiz
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Practise the questions
10 questions from this quiz
What are the three main channels through which government operates fiscal policy?
What are the three main channels through which government operates fiscal policy?
Expenditure, taxation, borrowing
Which type of public expenditure creates lasting assets for future generations?
Which type of public expenditure creates lasting assets for future generations?
Capital expenditure on infrastructure
Why are indirect taxes such as VAT considered regressive?
Why are indirect taxes such as VAT considered regressive?
Poorer households spend higher % of income
What does the Laffer curve demonstrate about tax rates beyond the optimal rate?
What does the Laffer curve demonstrate about tax rates beyond the optimal rate?
Higher tax rates lead to lower revenue
How does crowding out occur through financial markets?
How does crowding out occur through financial markets?
Govt borrowing raises interest rates
What is the key difference between national debt and fiscal deficit?
What is the key difference between national debt and fiscal deficit?
Debt is stock, deficit is flow
What characterizes a structural deficit compared to a cyclical deficit?
What characterizes a structural deficit compared to a cyclical deficit?
Persists even at full employment
Which describes means-tested transfer payments?
Which describes means-tested transfer payments?
Paid only to those on low incomes
How do automatic stabilisers help during a recession?
How do automatic stabilisers help during a recession?
Benefits rise, tax receipts fall
What does the Golden Rule of fiscal policy state?
What does the Golden Rule of fiscal policy state?
Borrow only to invest, not for spending