Fiscal Accounting
Which of the following team was eliminated in the round of 32 by a penalty shootout?
a. Portugal
b. The Netherlands
c. Japan
d. Ghana
b. The Netherlands
Why would the headline fiscal balance (net lending/borrowing) be a misleading indicator to assess whether fiscal policy stance is expansionary, contractionary, or neutral?
a. Because of measurement errors in the statistics related to spending and revenues.
b. Because of the time lag between the planning and execution of the budget.
c. Because one would need to disentangle the effect of the economic cycle on revenue and spending due to automatic stabilizers.
d. Because one would need to exclude the interest payments.
c. Because one would need to disentangle the effect of the economic cycle on revenue and spending due to automatic stabilizers
Under which of the economic conditions below is fiscal multiplier expected to be smaller?
a. There is a large output gap.
b. The monetary policy of the (regional) central bank is accommodative.
c. The economy has high propensity to import.
d. The households have high propensity to consume.
c. The economy has high propensity to import.
A traditional Wiener schnitzel is prepared on which of the following meat?
a. pork
b. chicken
c. veal
d. lamb
c. veal
What is the main idea behind the concept of Keynesian Macro-Stabilization?
a. Automatic stabilizers imply fiscal deficits which are sufficient to stabilize the economy in case of a big slump.
b. The government should build infrastructure to increase long-term growth.
c. Fiscal multipliers ensure that government revenue will always be greater than government spending.
d. There is a case to actively use fiscal policy when the economy falls largely below its potential, showing large spare capacity and high unemployment.
d. There is a case to actively use fiscal policy when the economy falls largely below its potential, showing large spare capacity and high unemployment.
Which one of the following statements best describes the Cyclically-adjusted Balance?
a. It is an estimate of the fiscal balance that would apply under current policies if the output gap were zero.
b. It is an estimate of the fiscal balance that would apply under current policies if the potential output were at its peak.
c. It is an estimate of the fiscal balance under Keynesian macro-stabilization policies to stabilize the economy.
d. It is an estimate of the fiscal balance that reflects economic upturns and downturns.
a. It is an estimate of the fiscal balance that would apply under current policies if the output gap were zero.
Which on the below is the tallest mountain known to us human?
a. Mount Fuji
b. Mount Everest
c. Mount Olympus
d. Mount Matterhorn
c. Mount Olympus
Which one of the following is one of the reasons fiscal multipliers tend to be smaller in emerging market and developing economies (EMDEs) than in advanced economies (AEs)?
a. The monetary policy is less accommodative in EMDEs than in AEs.
b. The share of informal sector is higher in EMDEs than in AEs.
c. The share of cash constrained households is higher in EMDEs than in AEs.
d. The exchange rate regimes in EMDEs are less flexible than in AEs.
b. The share of informal sector is higher in EMDEs than in AEs.
How is the buoyancy of a tax defined?
a. The percentage change in actual revenues divided by the percentage change in the tax base.
b. The percentage change in actual revenues divided by the percentage change in real GDP.
c. The percentage change in actual revenues divided by the percentage change in inflation.
d. The percentage change in actual revenues divided by the current balance of the central government.
a. The percentage change in actual revenues divided by the percentage change in the tax base.
Is there a short run and long run tradeoff in macroeconomic stabilization through sizable discretionary fiscal policy?
a. No, because short term macroeconomic stabilization would enhance long-term economic growth.
b. Yes, because expansionary fiscal policy to stabilize the economy in the short run increases fiscal deficits and debts, requiring larger financing in the future.
c. No, because the expansionary fiscal policy will be mostly financed by an increase in tax revenue during the economic recovery.
d. Yes, because large fiscal spending can send a signal to global investors that the country has weak fiscal discipline.
b. Yes, because expansionary fiscal policy to stabilize the economy in the short run increases fiscal deficits and debts, requiring larger financing in the future
Which one of the following should be categorized as below-the-line operations?
a. Receipt of grant by global aid community
b. Receipt of interest payments on loan extended to SOEs
c. Proceeds from selling government bond in the market
d. Proceeds from selling public land
c. Proceeds from selling government bond in the market
What is the definition of fiscal impulse?
a. It is the negative of the cyclically balanced primary balance
b. It is the yoy change in cyclically adjusted overall balance
c. It is the increase in cyclically adjusted expenditure
d. It is the yoy change in fiscal stance
d. It is the yoy change in fiscal stance
What are the fiscal expenditure that are typically associated with higher cumulative multipliers?
a. Wage bills
b. Fuel subsidies
c. Public investment
d. Purchase of goods and services
c. Public investment
When a government decides to reduce its spending, it should:
a. Cut expenditure across the board (i.e., general cuts, by the same percentage) for the sake of clarity.
b. Protect core spending programs and eliminate specific inefficient programs.
c. Cut social safety nets, which are wasteful and excessive in most countries.
d. Replace targeted transfers with generalized subsidies.
b. Protect core spending programs and eliminate specific inefficient programs.
What are the main reasons for large cross-country differences in the impact of fiscal stabilization?
a. Small automatic stabilizers in advanced countries and high debt in developing countries.
b. Large automatic stabilizers in advanced countries and limited fiscal space in developing countries.
c. High public debt in advanced countries and low debt in developing countries.
d. Activist fiscal policy in advanced and developing countries.
b. Large automatic stabilizers in advanced countries and limited fiscal space in developing countries.
The government delayed interest payments that were due in the fiscal year 2022 to fiscal year 2023. What is the consequence of such interest arrears on the fiscal balances in 2022 and 2023, compared to the case where the government honored the payments in 2022?
a. Under accrual-based accounting (GFSM2001/14), the fiscal balance in FY2022 improves while that of FY2023 deteriorates.
b. Under cash-based accounting (GFSM1986), the fiscal balance in FY2022 deteriorates while that of FY2023 improves.
c. Under accrual-based accounting (GFSM2001/14), the fiscal balances in FY2022 and FY2023 are unchanged.
d. Under cash-based accounting (GFSM1986), the fiscal balance in FY2022 and FY2023 are unchanged.
c. Under accrual-based accounting (GFSM2001/14), the fiscal balances in FY2022 and FY2023 are unchanged
Country X is a commodity exporter, and its fiscal revenue depends importantly on commodity exports. What is the relationship between its cyclically adjusted balance and its structural balance (which excludes the effect of commodity prices) during a large increase in global commodity prices (assuming that the economy is at its potential)?
a. The structural balance should be more deteriorated than the cyclically adjusted balance.
b. The structural balance should be less deteriorated than the cyclically adjusted balance.
c. The structural balance should be the same as the cyclically adjusted balance.
d. It is impossible to predict how the structural balance compares to the cyclically adjusted balance.
a. The structural balance should be more deteriorated than the cyclically adjusted balance.
Which of the following are needed for your macroeconomic projection to capture the feedback loop between the fiscal policy and the rest of the economy?
a. Ensuring consistency between the projection of that of public consumption and between the projection of non-interest expense and that of public investment and net acquisition of non-financial asset.
b. Ensuring consistency between the projection of domestic deficit financing and that of net domestic asset in the monetary survey.
c. Ensuring the consistency between the projection of external deficit financing and that of the financial account in Balance of Payments.
d. All of above.
d. All of above
Suppose your tax revenue forecasts are such that buoyancy < elasticity of tax revenue to tax base. What does that tell you about the effectiveness of your tax system refroms?
a. They were effective in raising more tax revenue for a given increase in tax base.
b. They were detrimental to raising tax revenue for a given increase in tax base.
c. It cannot be inferred from this information.
d. The reforms reduced the distortion to the economy
b. They were detrimental to raising tax revenue for a given increase in tax base.
Consider a small open economy with fixed exchange rate regime with liberalized capital market. What is the expected size of multiplier from an increase in public consumption?
a. Small because the increase in public consumption will be partly offset by the decrease in exports.
b. Small because the increase in public consumption will increase interest rates, crowding out private investment.
c. Large because the central bank will need to prevent currency appreciation.
d. 1
c. Large because the central bank will need to prevent currency appreciation.
What is Kallch Pacheh, Iran's favorite breakfast ?
a. Pizza with thymes and ketchup
b. Marinated beef steak
c. Slow cooked stew of lamb's head meat
d. Grilled seafood from the Caspian Sea
c. Slow cooked stew of lamb's head meat