Exam 29: Fiscal Policy

The economy is in a recession and the recessionary gap is large.Discretionary fiscal policy that might occur is ________.Automatic fiscal policy that might occur is ________.A discretionary fiscal stimulation package that would avoid a budget deficit is a simultaneous and equal ________.

If revenues exceed outlays,the government's budget balance is ________,and the government has a budget ________.

Suppose the tax rate on interest income is 50 percent,the real interest rate is 3 percent,and the inflation rate is 4 percent.The real after-tax interest rate is

If we compare Canada to France and the United Kingdom,Canada's tax wedge is ________ the French tax wedge and ________ the U.K.tax wedge.

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.Automatic fiscal policy would be shown as a movement

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 potential GDP is $750 billion,

A structural deficit

As a percentage of provincial GDP,provincial government outlays are highest in

Norland has the budget deficit of $15 billion.According to the government economists,Norland has a structural deficit of $3 billion.What is a cyclical deficit in Norland?

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.Discretionary expansionary fiscal policy would be shown as

A tax on interest income ________.

If the economy is in a recession,and the government has a budget deficit,then there

Which of the following is a government outlay?

According to the Laffer curve,raising the tax rate

Automatic fiscal policy

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.The budget is balanced when real GDP equals ________.

During an expansion,revenues

Which of the following is an example of a fiscal restraint policy?

If we compare the United States to France,we see that potential GDP per person in France is ________ than that in the United States because the French tax wedge is ________ than the U.S.tax wedge.

The Laffer Curve has been criticized by mainstream economists because