CFA 2026 Level I Economics Fiscal Policy Free Quiz 3

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CFA 2026 Level I Economics Fiscal Policy Free Quiz 3

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CFA 2026 Level I Economics Fiscal Policy Free Quiz 3

Practice CFA 2026 Level I Economics MCQs from Fiscal Policy. Get instant results with Explanation.

General5 MCQs

21. What is the deficit that remains when the economy is at potential GDP?

A. Structural deficitB. Cyclical deficitC. Primary deficitD. Total deficit

22. What part of the deficit is caused by the business cycle?

A. Structural deficitB. Cyclical deficitC. Primary deficitD. Total deficit

23. What type of fiscal policy focuses on incentives to increase potential GDP?

A. Demand-side fiscal policyB. Monetary policyC. Supply-side fiscal policyD. Trade policy

24. What theory suggests that consumers save tax cuts anticipating future tax increases?

A. Crowding-outB. Multiplier effectC. Laffer curveD. Ricardian equivalence

25. What is the primary purpose of discretionary fiscal policy?

A. Stabilizing the economy over the business cycleB. Promoting long-term economic growthC. Reducing income inequalityD. Reducing the national debt

General5 MCQs

26. What is the effect on GDP of equal increases in government spending and taxes?

A. ZeroB. Positive (close to 1)C. NegativeD. Zero

27. How can a budget deficit be financed?

A. Only by borrowing from the publicB. Only by creating moneyC. By borrowing from the public, foreign investors, or creating moneyD. Only by borrowing from foreign investors

28. What is a risk of monetizing government debt?

A. Crowding-outB. Laffer curveC. Ricardian equivalenceD. Inflation

29. What makes the fiscal multiplier larger?

A. Higher MPCB. Lower MPCC. Independent of MPCD. Higher marginal tax rate

30. How does the marginal tax rate affect the fiscal multiplier?

A. Higher marginal tax rateB. Lower marginal tax rateC. Independent of tax rateD. Higher transfer payments

📋 CFA - Test Online Practice Quizzes

CFA

Conducting Body: CFA Institute

Frequency: 4 times a year (February, May, August, November) | Time: 135 Minutes

Negative Marking: No

⚡ Test Pattern (Total: 90 MCQs):

Alternative Investments: 8 MCQs
Corporate Issuers: 7 MCQs
Derivatives: 5 MCQs
Economics: 7 MCQs
Equity Investments: 12 MCQs
Ethics: 16 MCQs
Financial Statement Analysis: 11 MCQs
Fixed Income: 11 MCQs
Portfolio Management: 9 MCQs
Quant Methods: 6 MCQs

Merit Formula: -

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