Exam 26: Fiscal Policy

The U.S. federal budget is a major summary document describing fiscal policy in the United States, including proposals for spending and taxes and the estimate of the corresponding budget deficit or surplus.

For real and potential GDP to be equal, the budget surplus has to be zero.

When tax revenues are equal to spending, there is a

In 2008, President Bush signed into law the Economic Stimulus Act that mainly included which of the following fiscal measures?

Which of the following types of taxes provide the least revenue for the federal government?

Which of the following is not an automatic stabilizer?

A supplemental is

The president and Congress typically settle on the budget before the beginning of the fiscal year.

To reduce the size of economic fluctuations, the government could

Critics of discretionary fiscal policy emphasize

Because of the length of the budget cycle, at any given time, the federal government is discussing

When tax revenues are less than spending, there is a

State and local government expenditures are

If real GDP equals C in the diagram below,

In 1986 the debt to GDP ratio was the highest it had been since the end of World War II.

Which of the following statements is true?

Suppose as a professional economist you are asked to take part in a debate about the wisdom of pursuing discretionary fiscal policy versus relying on automatic stabilizers. Outline some of the pros and cons for each side of the debate.

Which of the following is true?

Which of the following statements is true?

A policy rule