Public Finance and Fiscal Policy

When evaluating public finance in an economy, government allocations toward national defense, law enforcement, and central administration are functionally classified under expenditure on which of the following?

In a given fiscal year, a government's budgetary projections are presented as follows:

Based on the table above, what is the magnitude of the government's budget deficit in billions of Naira?

Which type of budget is implemented by a government when its proposed total expenditure exceeds its expected total revenue for a given fiscal year?

A government seeking to reduce the servicing cost of its existing long-term obligations replaces a high-interest bond issue with a new loan floated at a significantly lower rate of interest. Which public debt management technique is being utilized in this scenario?

An economy's current equilibrium national income is $\$1,200\text{ billion}$, while its full-employment potential national income is $\$1,500\text{ billion}$. The consumption function is $C = 150 + 0.75Y_d$, where $Y_d$ is disposable income ($Y_d = Y - T$), and the tax function is $T = 40 + 0.20Y$, where $Y$ is national income. To achieve economic stabilization at full employment using fiscal policy, by how much (in billions of dollars) must the government increase its expenditure ($G$)?

The government levies a per-unit indirect tax on a manufactured commodity. If the coefficient of price elasticity of demand is $0.25$ and the coefficient of price elasticity of supply is $1.25$, which of the following statements correctly describes the incidence of the tax?

A specific tax of $\text{₦}15$ per unit is imposed on a luxury commodity. Prior to the imposition of the tax, the equilibrium market price was $\text{₦}100$ per unit. Following the tax, the market price paid by consumers increases to $\text{₦}109$ per unit. What is the amount of the unit tax borne by the producer in Naira ($\text{₦}$)?

A government issues 91-day Treasury bills to cover an immediate deficiency in recurrent expenditure, while concurrently making systematic annual deposits into a dedicated reserve to redeem a 20-year bond issue at maturity. How are these two public debt instruments classified respectively?

In a financial year, a government collected $\text{₦}650\text{ billion}$ in tax revenue and $\text{₦}180\text{ billion}$ in non-tax revenue. During the same period, its recurrent expenditure was $\text{₦}520\text{ billion}$ and its capital expenditure was $\text{₦}460\text{ billion}$. What is the government's budget deficit in billions of Naira ($\text{₦}$)?

Which type of public debt is incurred to finance non-revenue-yielding activities, such as military expenditure or emergency relief, leaving behind no physical asset to yield income for its repayment?

A government levies an income tax where an earner with a monthly income of $\text{N}400,000$ pays $\text{N}60,000$, while an earner with a monthly income of $\text{N}800,000$ pays $\text{N}120,000$. Which system of taxation is being applied?

A government experiencing a persistent fiscal deficit decides to curtail its capital expenditure on vital infrastructure projects while simultaneously increasing recurrent expenditure to fund administrative overheads. Which of the following is the most likely long-term economic consequence of this budgetary control measure?

Unlike internal debt which involves a redistribution of purchasing power within a country, servicing external public debt imposes a real economic burden on the debtor nation. How does the repayment of interest and principal on external debt directly affect the domestic economy?

Match each public debt management strategy or concept on the left with its corresponding operational description on the right.

Which of the following financial instruments is issued by the government to borrow short-term funds from the money market?

Match each category or concept of public expenditure on the left with its correct characteristic or definition on the right.

Match each tax category or system on the left with its corresponding defining operational characteristic on the right.

The imposition of a $\text{₦}40$ unit tax on cement causes the market retail price to increase from $\text{₦}4,000$ to $\text{₦}4,010$. What fraction of the tax burden is borne by the supplier?

In an economy, the consumption function is given as $C = ₦50\text{ billion} + 0.8 Y_d$, where $Y_d$ represents disposable income. The government levies a flat proportional income tax rate of $25\%$ ($t = 0.25$) on total national income ($Y$). If the economy is currently experiencing a recessionary output gap of $₦200\text{ billion}$, calculate the required increase in government expenditure ($\Delta G$), in billions of Naira, to achieve full-employment equilibrium.

A government facing heavy debt service obligations decides to replace its maturing high-interest, short-term Treasury bills with long-term Treasury bonds that carry a lower coupon rate. Which public debt management mechanism has the government executed, and what is its primary economic effect?