Fiscal Policy and Public Debt quiz

More questions about Fiscal Policy and Public Debt

These visible examples show the question style. LearnClash turns the full topic into ranked duels and spaced repetition.

1. 1 Easy

   Who argued that states should spend more in a slump?

   Answer: John Maynard Keynes

   Why: Keynes laid out the case in The General Theory, a book written in the depths of the Great Depression.

2. 2 Medium

   How are investors who dump state debt to punish deficits nicknamed?

   Answer: Bond vigilantes

   Why: By selling, they drive up the interest rate a government must pay on new borrowing, which pressures it to rein in deficits.

3. 3 Hard

   How big is the balanced budget multiplier in the basic Keynesian model?

   Answer: 1

   Why: Households would have saved part of the extra tax, so spending all of it adds more demand than the tax removes.

4. 4 Easy

   Whose 2022 tax cuts made UK borrowing costs soar?

   Answer: Liz Truss

   Why: To halt forced selling by pension funds, the Bank of England started buying long-dated government bonds on 28 September 2022.

5. 5 Medium

   What are taxes and benefits that cushion slumps without new laws called?

   Answer: Automatic stabilizers

   Why: In a recession, income tax receipts fall and unemployment benefit payments rise on their own, propping up household incomes.

6. 6 Hard

   Who defaulted on his debts four times in the 16th century?

   Answer: Philip II

   Why: Philip never lost access to credit: within a year or two of each default, his bankers were lending to him again.