Question 1

Which of the following fiscal policy actions is most likely to increase aggregate supply?

Accepted Answer

A) an increase in personal income tax rates 
B) a reduction in interest rates that encourages consumers to purchase more durable goods 
C) an increase in transfer payments to unemployed workers 
D) an increase in government spending on infrastructure that increases private sector productivity 
A) an increase in personal income tax rates 
B) a reduction in interest rates that encourages consumers to purchase more durable goods 
C) an increase in transfer payments to unemployed workers 
D) an increase in government spending on infrastructure that increases private sector productivity

Question 2

From 1995 to 2001, the U.S.public debt relative to GDP

Accepted Answer

A) increased, and fell since then. 
B) decreased, and increased since then. 
C) increased steadily and continued to increase since then. 
D) was roughly constant, but has increased since. 
A) increased, and fell since then. 
B) decreased, and increased since then. 
C) increased steadily and continued to increase since then. 
D) was roughly constant, but has increased since.

Question 3

Assume that if there were no crowding out, an increase in government spending would increase GDP by $100 billion.On the other hand, if there had been full crowding out, then GDP would have

Accepted Answer

A) increased by more than $100 billion. 
B) increased by less than $100 billion. 
C) increased by $100 billion. 
D) not increased. 
A) increased by more than $100 billion. 
B) increased by less than $100 billion. 
C) increased by $100 billion. 
D) not increased.

Question 4

More than half of the U.S.public debt is owed to Americans.

Accepted Answer

A) True 
 B)False

Question 5

The more progressive the tax system, the

Accepted Answer

A) less is the built-in stability for the economy. 
B) greater is the built-in stability for the economy. 
C) less is the effect of crowding out on the economy. 
D) greater is the severity of business fluctuations on the economy. 
A) less is the built-in stability for the economy. 
B) greater is the built-in stability for the economy. 
C) less is the effect of crowding out on the economy. 
D) greater is the severity of business fluctuations on the economy.

Question 6

As the economy declines into recession, the collection of personal income tax revenues automatically falls.This phenomenon best illustrates how a progressive income-tax system

Accepted Answer

A) increases crowding out in the economy. 
B) decreases real interest rates in the economy. 
C) offsets the timing problem for fiscal policy. 
D) serves as an automatic stabilizer for the economy. 
A) increases crowding out in the economy. 
B) decreases real interest rates in the economy. 
C) offsets the timing problem for fiscal policy. 
D) serves as an automatic stabilizer for the economy.

Question 7

Approximately what percentage of the U.S.public debt is held by foreign individuals and institutions (2015)?

Accepted Answer

A) 26 percent 
B) 71 percent 
C) 41 percent 
D) 34 percent 
A) 26 percent 
B) 71 percent 
C) 41 percent 
D) 34 percent

Question 8

In Year 1, the actual budget deficit was $150 billion and the cyclically adjusted deficit was $125 billion.In Year 2, the actual budget deficit was $130 billion and the cyclically adjusted deficit was $125 billion.It can be concluded that from Year 1 to Year 2,

Accepted Answer

A) real GDP decreased. 
B) real GDP increased. 
C) full employment was attained. 
D) fiscal policy became less expansionary. 
A) real GDP decreased. 
B) real GDP increased. 
C) full employment was attained. 
D) fiscal policy became less expansionary.

Question 9

The goal of expansionary fiscal policy is to rein in inflation.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following fiscal policy changes would be the most contractionary?

Accepted Answer

A) a $40 billion increase in taxes 
B) a $10 billion increase in taxes and a $30 billion cut in government spending 
C) a $20 billion increase in taxes and a $20 billion cut in government spending 
D) a $30 billion increase in taxes and a $10 billion cut in government spending 
A) a $40 billion increase in taxes 
B) a $10 billion increase in taxes and a $30 billion cut in government spending 
C) a $20 billion increase in taxes and a $20 billion cut in government spending 
D) a $30 billion increase in taxes and a $10 billion cut in government spending

Exam 33: Fiscal Policy, Deficits, and Debt

Which of the following fiscal policy actions is most likely to increase aggregate supply?

From 1995 to 2001, the U.S.public debt relative to GDP

Assume that if there were no crowding out, an increase in government spending would increase GDP by $100 billion.On the other hand, if there had been full crowding out, then GDP would have

More than half of the U.S.public debt is owed to Americans.

The more progressive the tax system, the

As the economy declines into recession, the collection of personal income tax revenues automatically falls.This phenomenon best illustrates how a progressive income-tax system

Approximately what percentage of the U.S.public debt is held by foreign individuals and institutions (2015)?

In Year 1, the actual budget deficit was $150 billion and the cyclically adjusted deficit was $125 billion.In Year 2, the actual budget deficit was $130 billion and the cyclically adjusted deficit was $125 billion.It can be concluded that from Year 1 to Year 2,

The goal of expansionary fiscal policy is to rein in inflation.

Which of the following fiscal policy changes would be the most contractionary?

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures: Public Goods and Externalities

Governments Role and Government Failure

Elasticity

Utility Maximization

Behavioral Economics

Businesses and the Costs of Production

Pure Competition in the Short Run

Pure Competition in the Long Run

Pure Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Technology, Rd, and Efficiency

The Demand for Resources

Wage Determination

Rent, Interest, and Profit

Natural Resource and Energy Economics

Public Finance: Expenditures and Taxes

Antitrust Policy and Regulation

Agriculture: Economics and Policy

Income Inequality, Poverty, and Discrimination

Health Care

Immigration

An Introduction to Macroeconomics

Measuring Domestic Output and National Income

Economic Growth

Business Cycles, Unemployment, and Inflation

Basic Macroeconomic Relationships

The Aggregate Expenditures Model

Aggregate Demand and Aggregate Supply

Money, Banking, and Financial Institutions

Money Creation

Interest Rates and Monetary Policy

Financial Economics

Extending the Analysis of Aggregate Supply

Current Issues in Macro Theory and Policy

International Trade

The Balance of Payments, Exchange Rates, and Trade Deficits

The Economics of Developing Countries

Filters