Question 1

Suppose government spending rises by $120 billion.It follows that if private expenditures

Accepted Answer

A)  rise by $120 billion, complete crowding out exists. 
B)  fall by $100 billion, incomplete crowding out exists. 
C)  remain unchanged, complete crowding out exists. 
D)  rise by more than $120 billion, complete crowding out exists. 
E)  b and c 
A)  rise by $120 billion, complete crowding out exists. 
B)  fall by $100 billion, incomplete crowding out exists. 
C)  remain unchanged, complete crowding out exists. 
D)  rise by more than $120 billion, complete crowding out exists. 
E)  b and c

Question 2

The answer is: "After a policy measure is implemented,it takes time to affect the economy." What is the question?

Accepted Answer

A)  What is the wait-and-see lag? 
B)  What is the data lag? 
C)  What is the effectiveness lag? 
D)  What is the transmission lag? 
E)  What is the legislative lag? 
A)  What is the wait-and-see lag? 
B)  What is the data lag? 
C)  What is the effectiveness lag? 
D)  What is the transmission lag? 
E)  What is the legislative lag?

Question 3

Use the information provided in Exhibit 11-4. If a person's taxable income is $110,000,how much does he pay in taxes?

Accepted Answer

A)  $21,750 
B)  $33,000 
C)  $24,750 
D)  $21,840 
A)  $21,750 
B)  $33,000 
C)  $24,750 
D)  $21,840

Question 4

Fiscal policy refers to

Accepted Answer

A)  changes in the amount of government expenditures and taxes to achieve particular economic objectives. 
B)  changes in the composition of a given amount of government expenditures to achieve particular economic objectives. 
C)  changes in interest rates initiated by government action. 
D)  any change in government spending or taxes that has the intended effect of destabilizing the economy. 
A)  changes in the amount of government expenditures and taxes to achieve particular economic objectives. 
B)  changes in the composition of a given amount of government expenditures to achieve particular economic objectives. 
C)  changes in interest rates initiated by government action. 
D)  any change in government spending or taxes that has the intended effect of destabilizing the economy.

Exam 11: Fiscal Policy and the Federal Budget

Suppose government spending rises by $120 billion.It follows that if private expenditures

The answer is: "After a policy measure is implemented,it takes time to affect the economy." What is the question?

Use the information provided in Exhibit 11-4. If a person's taxable income is $110,000,how much does he pay in taxes?

Fiscal policy refers to

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