Here are the answers with discussion for this Weekend’s Quiz. The information provided should help you work out why you missed a question or three! If you haven’t already done the Quiz from yesterday then have a go at it before you read the answers. I hope this helps you develop an understanding of Modern…
The Weekend Quiz – July 8-9, 2017
Welcome to The Weekend Quiz. The quiz tests whether you have been paying attention or not to the blogs I post. See how you go with the following questions. Your results are only known to you and no records are retained.
Quiz #433
- 1. In terms of the initial impact on national income, a tax increase which aims to increase tax revenue at the current level of national income by $x is less damaging than a spending cut of $x?
- False
- True
- 2. If private households increase their saving from disposable income and firms reduce their investment expenditure, then the government has to expand its fiscal deficit to avoid employment losses.
- False
- True
- 3. During a recession, a government has to use expansionary fiscal policy to restore trend real GDP growth if it wants to reduce unemployment.
- False
- True
Sorry, quiz 433 is now closed.
You can find the answers and discussion here
Question one.
and this is why I don’t like multiple choice. I tend to overthink the things. It was easy to tick true, but here is a question. What if it was not an income tax but a large import duty (10 per cent across the board) in a “high importing”(including intermediate goods) country. Considering the inflationary and unemployment outcome, how fast then the impact on income compared to gov. spending cuts?
Argh Tax revenue !!!!! NO !!!!! receipts not revenue !!!!!