Economic policy
  • 1. Economic policy refers to the actions that a government takes in the economic sphere. It involves decisions on how resources are allocated, how taxes are levied, how regulations are implemented, and how monetary policy is conducted. Economic policy aims to promote economic growth, stability, and prosperity for a country's citizens. It encompasses a wide range of measures, including fiscal policy, monetary policy, trade policy, and regulatory policy. Effective economic policy requires a balance between market forces and government intervention to ensure sustainable economic development and social welfare.

    What is the role of supply-side economics in economic policy?
A) Emphasizes government interventions in market activities
B) Aims to redistribute wealth among citizens
C) Focuses on boosting long-term economic growth by increasing the supply of goods and services
D) Advocates for high levels of government spending
  • 2. Which of the following is a tool of trade policy?
A) Social security payments
B) Unemployment benefits
C) Tariffs
D) Income taxes
  • 3. What is the impact of a strong currency on exports?
A) It leads to increased demand for exports
B) It has no effect on export levels
C) It decreases the cost of exports and boosts competitiveness
D) It makes exports more expensive and can reduce competitiveness
  • 4. What is the purpose of an import quota in trade policy?
A) To limit the quantity of a specific imported good
B) To promote consumer choices
C) To stabilize currency exchange rates
D) To encourage domestic production of imports
  • 5. What is the purpose of a free trade agreement?
A) To eliminate tariffs and reduce trade barriers among participant countries
B) To impose trade restrictions for national security reasons
C) To regulate the prices of imported goods
D) To control the exchange rates between participating countries
  • 6. What is the purpose of competition policy?
A) To funnel government subsidies to favored industries
B) To increase government intervention in market activities
C) To control international trade agreements
D) To ensure fair competition and prevent anti-competitive practices in markets
  • 7. What is the primary function of the World Trade Organization (WTO) in trade policy?
A) To oversee environmental conservation efforts
B) To promote regional economic integration
C) To regulate international trade and resolve trade disputes
D) To enforce domestic tax policies
  • 8. Which of the following is a tool of fiscal policy?
A) Government spending.
B) Income tax collection.
C) Interest rate adjustments.
D) Foreign exchange market interventions.
  • 9. Which of the following is a tool of competition policy?
A) Antitrust laws
B) Import tariffs
C) Trade embargoes
D) Tax incentives for corporations
  • 10. What is the purpose of a wealth tax as part of tax policy?
A) Tax incentives for foreign investors
B) Tax deductions for charitable donations
C) Taxation on assets to reduce wealth inequality
D) Reducing income tax on high earners
  • 11. What is the relationship between inflation and unemployment in the Phillips Curve?
A) A direct relationship – higher unemployment is associated with higher inflation.
B) There is no relationship between inflation and unemployment.
C) Both move in the same direction – higher unemployment leads to lower inflation.
D) An inverse relationship – lower unemployment is associated with higher inflation.
  • 12. What does the term 'quantitative easing' represent in monetary policy?
A) Central bank's purchase of financial assets to increase money supply
B) Lowering currency exchange rates
C) Raising interest rates to control inflation
D) Restricting bank lending activities
  • 13. Which of the following is a tool of monetary policy?
A) Infrastructure spending.
B) Minimum wage legislation.
C) Open market operations.
D) Social security benefits.
  • 14. What does the term 'protectionism' refer to in trade policy?
A) The use of trade barriers to protect domestic industries from foreign competition
B) Promoting free trade agreements
C) Encouraging foreign direct investment
D) Supporting international trade organizations
Created with That Quiz — the math test generation site with resources for other subject areas.