Question : What is the purpose of a debt ceiling?
Option 1: To limit the amount of debt the government can take on
Option 2: To encourage economic growth
Option 3: To decrease taxes
Option 4: To decrease government spending
Correct Answer: To limit the amount of debt the government can take on
Solution : The correct answer is (a). To limit the amount of debt the government can take on.
A debt ceiling is a legislative mechanism that sets a maximum limit on the amount of debt that the government can legally incur. It serves as a restriction or a cap on the total amount of outstanding debt that the government can accumulate.
The purpose of a debt ceiling is to provide a measure of fiscal discipline and oversight by placing a limit on the government's borrowing capacity. It is designed to prevent excessive debt accumulation and to promote responsible fiscal management. When the government approaches or reaches the debt ceiling, it typically triggers a need for lawmakers to take action, such as raising the ceiling or implementing measures to reduce spending and address the debt situation.
Question : What is the purpose of a stimulus package?
Option 1: To increase government spending
Option 2: To decrease taxes
Option 3: To encourage economic growth
Option 4: To pay down the national debt
Question : What is the purpose of a government subsidy?
Option 1: To encourage economic growth in a particular sector
Option 2: To decrease government spending
Option 3: To increase taxes
Question : What is the purpose of a budget surplus?
Option 1: To pay down the national debt
Option 2: To increase government spending
Option 4: To encourage economic growth
Option 1: To limit the amount of debt that the government can incur
Option 2: To limit the amount of spending that the government can authorize
Option 3: To limit the amount of revenue that the government can collect
Option 4: To limit the amount of deficit spending that the government can engage in
Question : What is the purpose of a tax credit?
Option 1: To decrease the amount of taxes owed by an individual or corporation
Option 2: To increase the amount of taxes owed by an individual or corporation
Option 3: To decrease the amount of government spending on social welfare programs
Option 4: To increase the amount of government revenue
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