Budgetary Policy test 6 economicstutor.com.au

Which of the following measures is least likely to assist with the achievement of Economic Growth over the shorter term?
1. Lower personal income tax rates
2. A bigger budget deficit
3. Tax concessions for savings
4. Tax concessions for businesses that export
Which of the following measures is least likely to assist with the achievement of Full Employment in the shorter term?
1. Higher personal income tax rates
2. An increase in welfare payments
3. Increased spending on infrastructure
4. Tax concessions for businesses that export
Which of the following measures is least likely to assist with the achievement of price stability?
1. Higher personal income tax rates
2. A larger discretionary budget surplus
3. Measures to increase the participation rate
4. The removal of tax concessions for savings
Which of the following measures is least likely to assist with the achievement of greater equality in the distribution of income?
1. Means testing of welfare payments
2. Lower tax rates
3. An increase in the low income tax offset
4. An increase in the luxury car tax
Which of the following measures is least likely to assist with the achievement of a more efficient allocation of resources?
1. The introduction of a carbon tax
2. An increase in the tax on alcohol and tobacco
3. Rebates for the installation of solar panels
4. Lower personal income tax rates
Which of the following would not be regarded as a weakness of fiscal policy?
1. Implementation lags are long
2. Political hurdles can prevent or slow policy measures from being implemented (eg being blocked in the Senate)
3. Political bias resulting in policy measures being introduced that serve the interests of lobby groups rather than the interests of society more generally
4. It cannot target particular sectors of the economy
All of the following make budgetary policy a particularly powerful weapon when compared to monetary policy, with the exception of:
1. The ability to focus on particular sectors or market
2. It can assist in the achievement of all of the government's economic goals
3. It is released on a monthly basis and can therefore be responsive to changing economic conditions
4. The numerous stages that policy measures proceed through in parliament help to minimise the incidence of bad policy decisions.
The increase in the tax free threshold is a policy initiative that is most likely to be designed to assist with the achievement of
1. Economic Growth
2. Equity in the Distribution of Income
3. Price stability
4. Full Employment
Which of the following policy initiatives is least suited to tackle the problem of capacity constraints that might be experienced in the economy?
1. Increased funding for the provision of infrastructure
2. A decrease in income tax rates
3. An increase in funding to attract skilled migrants
4. Tax concessions for private investment in major road and rail projects
Which of the following is correct in relation to the underlying cash outcome and the headline cash outcome?
1. The Headline outcome includes future fund earnings
2. The underlying outcome includes net asset sales/purchases
3. The underlying outcome will always exceed the Headline outcome
4. The Headline outcome will always exceed the Underlying outcome

Budgetary Policy test 6 economicstutor.com.au

Multiple choice