Question 1

Fiscal policy involves

Accepted Answer

A)  the use of tax and money policies by government to influence the level of interest rates. 
B)  the use of tax and spending policies by the government. 
C)  decreasing the role of the Federal Reserve in the everyday life of the economy. 
D)  the use of interest rates to influence the level of GDP. 
A)  the use of tax and money policies by government to influence the level of interest rates. 
B)  the use of tax and spending policies by the government. 
C)  decreasing the role of the Federal Reserve in the everyday life of the economy. 
D)  the use of interest rates to influence the level of GDP.

Question 2

A budget deficit is the difference between

Accepted Answer

A)  foreign holdings of U.S. assets and U.S. holdings of foreign assets. 
B)  government tax revenues and government outlays. 
C)  U.S. imports and U.S. exports. 
D)  what U.S. consumers buy and U.S. producers produce. 
A)  foreign holdings of U.S. assets and U.S. holdings of foreign assets. 
B)  government tax revenues and government outlays. 
C)  U.S. imports and U.S. exports. 
D)  what U.S. consumers buy and U.S. producers produce.

Question 3

When tax revenues exceed outlays, the government has a , and when outlays exceed tax revenues, the government has a .

Accepted Answer

A)  budget surplus; budget deficit 
B)  budget surplus; budget debt 
C)  budget deficit; budget surplus 
D)  budget debt; budget surplus 
A)  budget surplus; budget deficit 
B)  budget surplus; budget debt 
C)  budget deficit; budget surplus 
D)  budget debt; budget surplus

Question 4

Rank the following federal government outlays from the largest to the smallest.
I. debt interest
II. transfer payments
III. expenditure on goods and services

Accepted Answer

A)  III, II, I 
B)  III, I, II 
C)  II, III, I 
D)  I, II, III 
A)  III, II, I 
B)  III, I, II 
C)  II, III, I 
D)  I, II, III

Question 5

Changes in which of the following is included as part of fiscal policy?

Accepted Answer

A)  the money supply 
B)  monetary policy 
C)  tax rates 
D)  the level of interest rates 
A)  the money supply 
B)  monetary policy 
C)  tax rates 
D)  the level of interest rates

Question 6

-Consider the above table with data for a country's government budget. The country has government revenues of billion.

Accepted Answer

A)  $725 
B)  $1125 
C)  $1700 
D)  $900 
A)  $725 
B)  $1125 
C)  $1700 
D)  $900

Question 7

During an expansion, tax revenues _, while during a recession, tax revenues .

Accepted Answer

A)  increase; decrease 
B)  fail to cover expenditures; fail to match transfer payments 
C)  decrease; increase 
D)  remain stable; decrease 
A)  increase; decrease 
B)  fail to cover expenditures; fail to match transfer payments 
C)  decrease; increase 
D)  remain stable; decrease

Question 8

Which of the following is true regarding induced taxes?
I. Induced taxes vary with disposable income.
II. Induced taxes cause the multiplier effect to be greater than it would be otherwise.
III. Induced taxes weaken the link between real GDP and disposable income.

Accepted Answer

A)  I, II and III 
B)  I and II 
C)  I and III 
D)  II and III 
A)  I, II and III 
B)  I and II 
C)  I and III 
D)  II and III

Question 9

Taxes and government expenditures that, without need for additional government action, change in response to changes in the level of economic activity are called

Accepted Answer

A)  cyclically balanced budgets. 
B)  built- in monetary stabilizers. 
C)  automatic stabilizers. 
D)  discretionary fiscal variables. 
A)  cyclically balanced budgets. 
B)  built- in monetary stabilizers. 
C)  automatic stabilizers. 
D)  discretionary fiscal variables.

Question 10

An automatic stabilizer

Accepted Answer

A)  requires action by the Congress. 
B)  involves a change in government purchases. 
C)  is triggered by the state of the economy. 
D)  involves a change in personal tax rates. 
A)  requires action by the Congress. 
B)  involves a change in government purchases. 
C)  is triggered by the state of the economy. 
D)  involves a change in personal tax rates.

Question 11

An increase in the tax rates as a result of a new tax law passed by Congress is an example of
)

Accepted Answer

A)  needs- tested taxing change. 
B)  increasing the government deficit 
C)  discretionary fiscal policy 
D)  increasing the government debt 
A)  needs- tested taxing change. 
B)  increasing the government deficit 
C)  discretionary fiscal policy 
D)  increasing the government debt

Question 12

-Using the above figure, if full employment occurs at $10 trillion, but the economy is actually producing $12 trillion, then there is a

Accepted Answer

A)  cyclical deficit. 
B)  structural surplus. 
C)  structural deficit. 
D)  cyclical surplus. 
A)  cyclical deficit. 
B)  structural surplus. 
C)  structural deficit. 
D)  cyclical surplus.

Question 13

The government could increase aggregate demand by $1 trillion by

Accepted Answer

A)  increasing its expenditures on goods and services by less than $1 trillion. 
B)  increasing its taxes by less than $1 trillion. 
C)  increasing its expenditures on goods and services by exactly $1 trillion. 
D)  increasing its expenditures on goods and services by more than $1 trillion. 
A)  increasing its expenditures on goods and services by less than $1 trillion. 
B)  increasing its taxes by less than $1 trillion. 
C)  increasing its expenditures on goods and services by exactly $1 trillion. 
D)  increasing its expenditures on goods and services by more than $1 trillion.

Question 14

The Employment Act of 1946 was NOT concerned with

Accepted Answer

A)  farming price supports. 
B)  economic growth. 
C)  price stability. 
D)  full employment. 
A)  farming price supports. 
B)  economic growth. 
C)  price stability. 
D)  full employment.

Question 15

In response to the economic downturn, New Zealand's government had enacted a $3.8 stimulus pa
HYPERLINK "http://www.iht.com/" www.iht.com, 11/26/20
The stimulus plan is considered

Accepted Answer

A)  contractionary fiscal policy. 
B)  discretionary fiscal policy. 
C)  needs- tested spending. 
D)  automatic fiscal policy. 
A)  contractionary fiscal policy. 
B)  discretionary fiscal policy. 
C)  needs- tested spending. 
D)  automatic fiscal policy.

Question 16

If the government's outlays are $1.5 trillion and its tax revenues are $2.2 trillion, the government is running a budget

Accepted Answer

A)  deficit of $3.7 trillion. 
B)  surplus of $0.7 trillion. 
C)  deficit of $0.7 trillion. 
D)  surplus of $3.7 trillion. 
A)  deficit of $3.7 trillion. 
B)  surplus of $0.7 trillion. 
C)  deficit of $0.7 trillion. 
D)  surplus of $3.7 trillion.

Question 17

Using the two GDP identities, in a formula show the impact of a government sector deficit on the supply of saving and briefly discuss its effect on the saving supply curve.

Accepted Answer

GDP = C + I + G + NX and also GDP = C +

Question 18

-Does the figure above illustrate a recessionary or an inflationary gap? What do potential GDP and real GDP equal? What is an appropriate fiscal policy to restore real GDP to potential real GDP?

Accepted Answer

A inflationary gap occurs when real GDP

Question 19

Induced taxes decrease the size of the government expenditure multiplier.

Accepted Answer

A) True 
 B)False

Question 20

What is needs- tested spending and how does it affect the government expenditure multiplier?

Accepted Answer

Needs- tested spending is government spe

Fiscal policy involves

A budget deficit is the difference between

When tax revenues exceed outlays, the government has a , and when outlays exceed tax revenues, the government has a .

Rank the following federal government outlays from the largest to the smallest. I. debt interest II. transfer payments III. expenditure on goods and services

Changes in which of the following is included as part of fiscal policy?

-Consider the above table with data for a country's government budget. The country has government revenues of billion.

During an expansion, tax revenues _, while during a recession, tax revenues .

Which of the following is true regarding induced taxes? I. Induced taxes vary with disposable income. II. Induced taxes cause the multiplier effect to be greater than it would be otherwise. III. Induced taxes weaken the link between real GDP and disposable income.

Taxes and government expenditures that, without need for additional government action, change in response to changes in the level of economic activity are called

An automatic stabilizer

An increase in the tax rates as a result of a new tax law passed by Congress is an example of )

-Using the above figure, if full employment occurs at $10 trillion, but the economy is actually producing $12 trillion, then there is a

The government could increase aggregate demand by $1 trillion by

The Employment Act of 1946 was NOT concerned with

In response to the economic downturn, New Zealand's government had enacted a $3.8 stimulus pa HYPERLINK "http://www.iht.com/" www.iht.com, 11/26/20 The stimulus plan is considered

If the government's outlays are $1.5 trillion and its tax revenues are $2.2 trillion, the government is running a budget

Using the two GDP identities, in a formula show the impact of a government sector deficit on the supply of saving and briefly discuss its effect on the saving supply curve.

-Does the figure above illustrate a recessionary or an inflationary gap? What do potential GDP and real GDP equal? What is an appropriate fiscal policy to restore real GDP to potential real GDP?

Induced taxes decrease the size of the government expenditure multiplier.

What is needs- tested spending and how does it affect the government expenditure multiplier?

What Is Economics

The Economic Problem

Demand and Supply

Measuring Gdp and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers: They Keynesian Model

U.S. Inflation, Unemployment, and Business Cycle

Monetary Policy

International Trade Policy

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Exam 13: Fiscal Policy

Fiscal policy involves

A budget deficit is the difference between

When tax revenues exceed outlays, the government has a , and when outlays exceed tax revenues, the government has a .

Rank the following federal government outlays from the largest to the smallest. I. debt interest II. transfer payments III. expenditure on goods and services

Changes in which of the following is included as part of fiscal policy?

-Consider the above table with data for a country's government budget. The country has government revenues of billion.

During an expansion, tax revenues _, while during a recession, tax revenues .

Which of the following is true regarding induced taxes? I. Induced taxes vary with disposable income. II. Induced taxes cause the multiplier effect to be greater than it would be otherwise. III. Induced taxes weaken the link between real GDP and disposable income.

Taxes and government expenditures that, without need for additional government action, change in response to changes in the level of economic activity are called

An automatic stabilizer

An increase in the tax rates as a result of a new tax law passed by Congress is an example of )

-Using the above figure, if full employment occurs at $10 trillion, but the economy is actually producing $12 trillion, then there is a

The government could increase aggregate demand by $1 trillion by

The Employment Act of 1946 was NOT concerned with

In response to the economic downturn, New Zealand's government had enacted a $3.8 stimulus pa HYPERLINK "http://www.iht.com/" www.iht.com, 11/26/20 The stimulus plan is considered

If the government's outlays are $1.5 trillion and its tax revenues are $2.2 trillion, the government is running a budget

Using the two GDP identities, in a formula show the impact of a government sector deficit on the supply of saving and briefly discuss its effect on the saving supply curve.

-Does the figure above illustrate a recessionary or an inflationary gap? What do potential GDP and real GDP equal? What is an appropriate fiscal policy to restore real GDP to potential real GDP?

Induced taxes decrease the size of the government expenditure multiplier.

What is needs- tested spending and how does it affect the government expenditure multiplier?

What Is Economics

The Economic Problem

Demand and Supply

Measuring Gdp and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers: They Keynesian Model

U.S. Inflation, Unemployment, and Business Cycle

Monetary Policy

International Trade Policy

Filters