1. Which of the following pairs of terms is used to describe fluctuations in the

Question

1. Which of the following pairs of terms is used to describe fluctuations in the economy? a. Real and nominal b. Expand and contract c. Revenue and expenditure d. Deficit and debt O O 2. Which of the following best defines government revenue? a. Government programs designed to improve economic equity b. Income the government receives from taxes and other nontax sources c. Money the government spends to buy goods and services d. A tax for which high-income earners pay a larger fraction of their income in taxes than low- income earners

Explanation / Answer

1. Terms used to define fluctuations in economy is referred by (b) Expansion and Contraction. Therefore the correct option is (b) Expand and Contract.

2. Government earns its revenues by way of collecting taxes from the citizens of the country, also government has other sources of income to generate revenue, they can be by earning profits on government owned companies, Investments, etc, which can otherwise be known as other sources of income. So the correct option is (b) Income that government receives from taxes and other nontax sources.

3. Economic growth, inflation tends to change cyclically. Unemployed reduces during the expansionary phase of business cycle. Hence in this question, its the option (a) is the correct answer. During expansionary phase of business cycle, fewer people are unemployed.

4. A Depression is a severe and long lasting economic downturn that is worse and deeper than recession.

So the correct option is (d) A Depression

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