Question 21(1 point)

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What is fiscal policy?

Question 21 options:

a)	It is the government's approach to its own spending and taxation.

b)	It is the total spending by all levels of government.

c)	It is the use of interest rate policy by the central bank to stabilize an economy.

d)	It is the central bank's approach to interest rate policy.

Question 22(1 point)

Suppose that the government's total tax receipts are $130, government spending on goods and services is $100 and transfer payments (public expenditures) are $40. What is the government's budget surplus or deficit?

Question 22 options:

a)	A deficit of $30.

b)	A deficit of $10.

c)	A surplus of $10.

d)	A surplus of $30.

Question 23(1 point)

What is an appropriate reason for the government to borrow money?

Question 23 options:

a)	To inject new spending into the economy.

b)	To discourage waste in fiscal affairs.

c)	To compensate for a lower bond rating.

d)	To encourage foreign ownership of the debt.

Question 24(1 point)

Mortgage loans are an important activity for banks, and the US banks have been very conservative relative to their Canadian counterparts.

Question 24 options:

	a) True
	b) False

Question 25(1 point)

In the figure below, a movement from pointAto pointBalong the demand curve would be caused by

Question 25 options:

a)	an increase in the interest rate.

b)	an decrease in taxes.

c)	a decrease in the price level.

d)	a decrease in real GDP.

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