Exam 10: Fiscal Policy

Recall Application 3, "Evaluating the Obama Fiscal Stimulus" to answer the following questions: -According to the application, did the economic stimulus package of the U.S. in 2009 have an economic effect?

Fiscal policy affects aggregate demand.

An increase in the federal budget deficit during a recession serves as an automatic economic stabilizer because:

Because taxes and transfer payments such as unemployment insurance act to change GDP without the need for policymakers to take explicit action, then these taxes and transfer payments are called:

Use the Aggregate Demand - Aggregate Supply model to show how expansionary fiscal policy increases the level of GDP and also raises the price level.

The tax surcharge enacted during the Vietnam War failed to reduce aggregate demand because the tax surcharge was only temporary.

Recall Application 2, "The Confucius Curve?" to answer the following questions: -According to the application, when Yu Juo was asked what should be done when the government had insufficient funds, his response was:

Which of the following is not considered a fiscal policy?

The length of time that Congress takes to formulate a tax bill to help the economy is part of the:

The largest category of federal spending is:

The largest category of discretionary federal spending is:

Recall Application 2, "The Confucius Curve?" to answer the following questions: -According to the application, if an economy experiences a recession, it should:

A government policy that leads to an increase in aggregate demand is called:

Which of the following is a federal and state health program that benefits the elderly?

Fiscal policy affects aggregate demand because:

The existence of lags in implementing fiscal policy can magnify economic fluctuations.

The federal budget runs a surplus if tax revenues exceed government spending.

Balancing the budget during an economic recession brings the economy closer to full employment.

What were some of the events that occurred in the 21st century that contributed to the dramatic rise in the budget deficit and in the government's debt?

Revenue from federal individual income taxes is larger than revenue from corporate income taxes.