Exam 29: Fiscal Policy

Consider the economy of NoTax,where the multiplier is 2.5.If the government desires to shift the AD curve rightward by $5 billion,the correct increase in government expenditure is

An advantage of automatic stabilizers over discretionary fiscal policy is that

Everything else remaining the same,as the economy enters a recession,

The government increases the tax rate on labour income and at the same time cuts the rate of sales tax to keep the amount of tax collected constant.As a result,the supply of labour ________,the demand for labour ________,and the equilibrium level of employment ________.The before-tax wage rate ________,and the after-tax wage rate ________.Potential GDP ________.

Suppose that in China,investment is $400 billion,saving is $400 billion,tax revenues are $500 billion,exports are $300 billion,and imports are $200 billion.The government budget ________ the supply of loanable funds,which ________ the real interest rate and ________ investment.

The Federal Budget of 2011-12 projected ________.

Use the figure below to answer the following questions. Figure 29.3.1 -Refer to Figure 29.3.1,which shows the outlays and revenues for the government of Pianoland.If real GDP equals $550 billion,the budget is

Use the figure below to answer the following questions. Figure 29.3.1 -Refer to Figure 29.3.1,which shows the outlays and revenues for the government of Pianoland.A discretionary fiscal restraint policy would be shown as

Government debt is

During a recession,revenues

Use the figure below to answer the following questions. Figure 29.3.1 -Refer to Figure 29.3.1,which shows the outlays and revenues for the government of Pianoland.An automatic increase in tax revenues would be shown as a

Suppose that in China,investment is $400 billion,saving is $400 billion,tax revenues are $500 billion,exports are $300 billion,and imports are $200 billion.________ in government expenditure or ________ in taxes will further increase China's budget ________,increase investment and speed economic growth.

Prior to World War II,the purpose of the federal budget was to ________.

Which one of the following happens automatically if the economy goes into a recession?

Outlays as a percentage of provincial GDP are the highest in ________,whereas the largest transfers from the federal government are made to ________.

In 2011,Canada had ________.

An income tax cut that provides a greater incentive to work than an alternative tax cut will result in comparatively

The main components of government revenues are

The structural deficit is the deficit

Consider all the effects of fiscal policy.A cut in the income tax