Exam 13: Fiscal Policy

During the Reagan administration in the 1980s, tax rates were _________and the budget deficit_________

Year Government tax revenues (billions of dollars) Government expenditures (billions of dollars) 1 240 240 2 250 245 3 260 255 4 300 320 5 325 340 -What is the amount of the surplus or deficit incurred in year 3 by the government shown in the above table?

In 2011, the U.S. government budget had a deficit. By definition, then,

Component Dollars (billion) Personal income taxes 500 Social security taxes 400 Corporate income taxes 150 Indirect taxes 75 Transfer payments 1,200 Expenditure on goods and services 225 Debt interest 75 -The table above has data for a country?s government budget. The data show the government is running a__________ billion.

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

The government budget deficit tends to decrease during the expansion phase of a business cycle because tax revenues_________ and government transfer payments_________ .

Which of the following are a limitation of fiscal policy? I. There is a lag between recognizing that fiscal policy might be needed and when it actually takes effect. II. Economic forecasts might be incorrect. III. Monetary policy might counter fiscal policy.

A country reports that its government outlays total $1.8 trillion and its receipts total $1.6 trillion. Does the country have a budget surplus or deficit and what is the surplus or deficit?

If employment is less than full employment, what fiscal policy should the government pursue?

What is the difference between discretionary fiscal policy and automatic fiscal policy?

Ignoring any supply-side effects, how does the magnitude of the government expenditure multiplier compare to the magnitude of the tax multiplier? Explain your answer.

The magnitude of the tax multiplier_________ the magnitude of the government expenditure multiplier.

If tax receipts exactly equaled government outlays in a year, the federal government debt would be zero.

The aggregate demand curve is shifted rightward by

During an expansion, tax revenues _________and government transfer payments_________ .

If the governmentʹs budget is in surplus even when the economy is at full employment, the surplus is said to be

The government begins year 1 with $25 billion of debt. Based on the information in the above table, what is the amount of debt following year 3?

How has the federal government debt as a percentage of GDP changed since the end of World War II?

What does the Employment Act of 1946 specify? Why is it an important economic milestone?

A fiscal stimulus is used to increase production and employment.