Exam 13: Fiscal Policy

If employment exceeds full employment, what fiscal policy actions could eliminate the gap?

An increase in the government _ reduces the government's .

An increase in taxes on labor income shifts the labor supply curve and the .

If tax revenue equal $1.5 billion and government outlays equal $1.6 billion, then the

According to the Laffer curve, raising the tax rate

When government outlays exceed tax receipts, does the government have a budget deficit or surplus?

Expansionary fiscal policy is used when the economy is expanding too fast.

Suppose the only revenue taken in by the government is in the form of income tax, and the tax rate is 10 percent. If aggregate income is $800 billion, and government outlays are $100 billion then the government budget has

A budget surplus occurs when government

In January 2008, the unemployment rate was only 4.9 percent and real GDP was growing. But President Bush "acknowledged that Americans were 'anxious about the economy.' As a result, it was reported that "...the Bush administration and Congressional leaders, increasingly concerned about a possible recession, are moving closer to agreeing that an economic stimulus package is needed soon." In order for the package to be approved, the leaders in Washington implied that "... t might be able to put aside longstanding partisan differences ." HYPERLINK "http://www.nytimes.com/" www.nytimes.com, 1/12/20 Which of the following lags are government officials trying to avoid?

Government transfer payments during expansions and during recessions.

A tax cut decreases government saving and can thereby crowd out investment.

-In the above figure, if the economy initially is at point A and government expenditure increases, in the short run the economy will move to point

Using fiscal policy, the best way to get the economy out of a recession in the short run is to Government expenditures on goods and services or taxes.

The sum of past budget deficits in excess of the sum of past budget surpluses refers to

Since 1942, the federal government debt as a percentage of GDP

What are some of the limitations of fiscal policy? Briefly discuss them.

An example of a fiscal policy designed to decrease real GDP is

Discuss the federal budget history of the United States since 1980. Make sure to note specifically the budget position of the United States during the last of the 1990s and through the 2000s.

-In the above figure, if the economy is initially at point D and government expenditure increases, the economy will move to point