Exam 13: B: Fiscal Policy, Deficits, Surpluses, and Debt

If the government increases its spending during recession to assist the economy, the funds for such expenditures must come from some source.Which of the following sources would be the most expansionary?

Refer to the above diagram wherein T is tax revenues and G is government expenditures.All figures are in billions.The equilibrium level of GDP in this economy:

Expansionary fiscal policy will do what to the government budget, assuming that was balanced at the start?

In Year 1, the actual budget deficit was $200 billion and the cyclically adjusted deficit was $150 billion.In Year 2, the actual budget deficit was $225 billion and the cyclically adjusted deficit was $175 billion.It can be concluded that fiscal policy from Year 1 to Year 2 was:

Using Image 13.2 Global Perspective, which of the following countries had the highest publicly held debt as a percentage of GDP in 2015?

Refer to the above data.If a lump-sum tax (the same tax amount at each level of GDP) of $40 is now imposed in this economy, the consumption schedule will be:

In a certain year the aggregate amount demanded at the existing price level consists of $100 billion of consumption, $40 billion of investment, $10 billion of net exports, and $20 billion of government purchases.Full-employment GDP is $120 billion.To obtain price level stability under these conditions the government should:

Incurring an internal debt to finance a war does not pass the cost of the war on to future generations because:

International flows of financial capital in response to interest rate changes in Canada:

If the cyclically adjusted budget deficit increases from $200 billion to $250 billion and GDP remains constant over the two years:

Refer to the data below.If year 1 is the first year of this nation's existence and year 4 is the present year, the public debt as a percentage of GDP in year 4 is: The following budget information is for a hypothetical economy.All data are in billions of dollars.

The crowding-out effect suggests that:

Which combination of fiscal policy actions would most likely be offsetting?

Refer to the above data.If a lump-sum tax (the same tax amount at each level of GDP) of $40 is imposed in this economy, we can conclude that the tax:

The federal budget deficit is found by:

The actual and full-employment budgets will be equal when the economy is at full-employment.

In an aggregate demand-aggregate supply diagram, equal decreases in government spending and taxes will:

The direction of discretionary fiscal policy cannot be examined by a simple look at the changes in the actual budget deficits or surpluses.This is because:

Other things equal, which of the policies will have the most expansionary effect on the economy?

The largest proportion of the public debt is held by: