Fiscal Policy

Question 1

What is the purpose of fiscal policy?

Answer 1

Fiscal policy or budgetary policy relates to anticipated changes in the level and composition of government revenue and government expenditure.

Question 2

What are some fiscal policy initiatives?

Answer 2

Baby bonus, NDIS, VETiS funding, fair play vouchers, social welfare.

Question 3

What is a budget surplus?

Answer 3

A budget surplus is where government spending is less then government taxes.

Question 4

What is a budget deficit?

Answer 4

A budget deficit is where government spending is greater than government taxes

Question 5

What is discretionary fiscal policy?

Answer 5

Discretionary fiscal policy is when taxation is planned, and spending is per the budget.

Question 6

What is non-discretionary fiscal policy?

Answer 6

Non-discretionary fiscal policy is built into the system. It’s automatic, and doesn’t need to be approved in the budget each year.

Question 7

What is expansionary fiscal policy?

Answer 7

Expansionary fiscal policy is an increase in expenditure to stimulate economic activity and reduce unemployment.

Question 8

What is contractionary fiscal policy?

Answer 8

Contractionary fiscal policy is a decrease in expenditure to contract economic activity and curb inflation.