CFA L1 Notes

R14 练习: Fiscal Policy

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R14 练习: 财政政策

考纲范围

  • compare monetary and fiscal policy.
  • describe roles and objectives of fiscal policy as well as arguments as to whether the size of a national debt relative to GDP matters.
  • describe tools of fiscal policy, including their advantages and disadvantages.
  • explain the implementation of fiscal policy and difficulties of implementation as well as whether a fiscal policy is expansionary or contractionary.

Q1.

Monetary policy is directed by the central bank to:

A. influence the government’s spending and taxation.

B. set long-term and short-term goals for broad money growth.

C. adjust the economy by regulating money supply and credit growth.

Q2.

Fiscal policy is often viewed as an effective tool to help economic function in order, which of following is least likely correct about the purpose of a tight fiscal policy?

A. To intervene exchange rate

B. To cool down overheated economy

C. To reduce the risk of high inflation

Q3.

The economic system has the internal mechanism of the automatic stabilizer. When the economy is overheated or over-cold, the automatic stabilizer will automatically restrain or expand the total demand to smooth the economy by adjusting the government revenue and expenditure. Which of the following statements is most likely to be correct about this mechanism?

A. When the economy overheats, the automatic stabilizer will increase the fiscal surplus.

B. When the economy over-cools, the automatic stabilizer will reduce the fiscal deficit.

C. When the economy overheats, the automatic stabilizer will increase the fiscal deficit.

Q4.

Which of the following regarding Ricardian equivalence is least likely correct?

A. The private sector might increase savings to offset future increased taxes.

B. It supports the opinion that budget deficits should be given considerable concerns.

C. It claims the budget deficits issue is overrated.

Q5.

A government is experiencing a sustained fiscal deficit, which could give rise to concerns about the national debt issue. Which of the following is most likely to be the reason for such concerns?

A. A high national debt level would make the market lost confidence in the government.

B. Increased savings could counteract the fiscal deficit.

C. Money borrowed is invested in capital projects and then future output and tax revenue improve.

Q6.

According to the model calculation, the potential gross domestic product (GDP) of country X is \trillion, but the country’s actual GDP recorded \trillion this year. If the government takes measures to regulate and control, which of the following measures is most likely to be taken?

A. Cut spending on high-speed railway construction plans.

B. Increase the transfer payment for residents’ housing support.

C. Lower the tax base of businesses value-added tax.

Q7.

An analyst said the following when studying macroeconomic policies:

Statement 1: the government’s national defense and other construction investment plans will only benefit specific groups, while the government’s tax policies generally have the characteristics of promoting social equity.

Statement 2: it takes a longer time for the government’s large-scale capital expenditure policy to stimulate economic development, while the role of government tax policy generally shows its role faster.

Statement 3: the expectation effect of government fiscal policies is greater than the direct effect.

For the above three statements, how many are most likely to be correct?

A. 1

B. 2

C. 3

Q8.

Which of the following limitations of discretionary fiscal policy is best described as the time for the government to process data and figure out the problem?

A. Recognition lag

B. Action lag

C. Impact lag

Q9.

Which of the following statements is most likely considered a contractionary fiscal policy?

A. The revenue from taxation has been increasing.

B. The budget deficit is lower than the deficit under full employment.

C. A budget surplus has always existed.

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