Exam 27: Fiscal Policy

If the tax multiplier is -1.5 and a $200 billion tax increase is implemented, what is the change in GDP, holding everything else constant? (Assume the price level stays constant.)

Double taxation refers to

The government purchases multiplier is defined as

In 2017, the Congressional Budget Office forecast that real GDP would grow at an average annual rate of ________ for the years 2017-2027.

An increase in government purchases of $200 billion will shift the aggregate demand curve to the right by

Figure 27-5 -Refer to Figure 27-5. In the dynamic model of AD-AS in the figure above, if the economy is at point A in year 1 and is expected to go to point B in year 2, and no fiscal or monetary policy is pursued, then at point B

The long-run growth rate of real GDP depends primarily on the growth in the number of hours worked and the growth rate of labor productivity.

An appropriate fiscal policy response when aggregate demand is growing at a faster rate than aggregate supply is to decrease the money supply.

What economic impact would the closing of a nearby military base have on a town? Would people and businesses that did not directly deal with the military personnel be affected?

The largest and fastest-growing category of federal government expenditures is

Figure 27-4 -Refer to Figure 27-4. In the graph above, suppose the economy is initially at point A. The movement of the economy to point B as shown in the graph illustrates the effect of which of the following policy actions by Congress and the president?

If Congress wanted to counteract the effects of a recession it could

What is the government purchases multiplier if the tax rate is 0.1 and the marginal propensity to consume is 0.9? Assume the economy is closed.

The tax multiplier is smaller in absolute value than the government purchases multiplier because some portion of the

The federal government debt as a percentage of GDP did not rise

A decrease in the tax rate will ________ the disposable income of households and ________ the size of the multiplier effect.

Which of the following is more likely to be effective in increasing the growth rate of real GDP?

What is the government purchases multiplier if the tax rate is 0.2 and the marginal propensity to consume is 0.8? Assume the economy is closed.

The increase in the amount that the government collects in taxes when the economy expands and the decrease in the amount that the government collects in taxes when the economy goes into a recession is an example of

During most of the years of the Great Depression, the actual federal budget was in ________, and the cyclically adjusted budget was in ________.