Exam 12: Fiscal Policy, Incentives, and Secondary Effects

Keynesians and non-Keynesians would largely agree on which one of the following statements?

Which of the following is the strongest evidence of a shift toward a more expansionary fiscal policy?

Budget projections for 2014-2020 indicate both higher levels of government spending and large budget deficits. Non-Keynesian economists argue that this will lead to

Measured as a share of GDP, the borrowing of the federal government from foreigners

In response to the recession of 2008-2009, the United States

The new classical model implies that substitution of debt for tax financing

The tax reductions, increases in defense expenditures, and budget deficits of the 1980s are characteristic of

Compared to a permanent reduction in tax rates, a temporary tax cut will generally

Which of the following helped transform the budget deficits of the early 1990s into surpluses later in the decade?

Which of the following most clearly indicates that fiscal policy is becoming more restrictive?

Compared to a reduction in tax rates, a one-time tax rebate will exert

The fiscal policy response to the recession of 2008-2009 was

According to the Keynesian view, the rapid increase in government spending and large budget deficits in response to the recession of 2008-2009 would

Supply-side economics stresses that high marginal tax rates

Spending programs that substantially alter the composition of aggregate demand will tend to

Which of the following is true of debt financing?

Which of the following will be most likely to dampen the expansionary effects of an increase in government spending financed by borrowing?

When the tax rates imposed on the rich are high, a reduction in these rates

Which of the following attributes of fiscal policy will most likely be stressed by a proponent of supply-side economics?

New classical economists believe that an increase in deficit financing by the government will