Exam 12: Fiscal Policy, Incentives, and Secondary Effects

If the government cuts the tax rate, workers get to keep

Expansionary fiscal policy during a recession is most effective when it

Which of the following is true with regard to the use of countercyclical fiscal policy as a stabilization tool?

Which of the following is a consensus view among economists with regard to fiscal policy?

From 1990 to the year 2000, real federal spending rose about 21 percent, while from 2000 to 2010, real federal spending rose by about

The crowding-out effect implies that a

Increases in government expenditures and large budget deficits are projected for 2014-2020. If strong growth is observed during this decade, this would be most consistent with

Which of the following is true of government debt?

Keynesian economists argue that during a recession

Which of the following best describes the crowding-out effect?

What effect will expansionary fiscal policy have on the economy, according to new classical economists?

Diego's annual income increased from $20,000 to $25,000. If Diego faces a 40 percent effective marginal tax rate, the $5,000 increase in income will expand his disposable income by

Increases in government expenditures and large budget deficits are projected for 2014-2020. If the economic recovery is weak and growth is sluggish during this decade, this will be

According to the new classical view, budget deficits will

Both Keynesians and non-Keynesians now recognize

If the crowding-out effect is strong, how will the potency of discretionary fiscal policy be affected?

New classical economists stress that an increase in government expenditures financed by borrowing rather than taxes will

If decreased government borrowing drives down real interest rates in the United States,

The crowding-out effect implies that restrictive fiscal policy will

The new classical model implies that a