Exam 13: Fiscal Policy

A report on the EU economic stimulus plan suggested that "... Governments must consider ... cutting VAT [value added tax] and labor taxes ..." The VAT is similar to a sales tax. If governments follow the suggestions, there will be ________ according to the supply-side view.

Which of the following is the largest source of federal government revenue?

The stimulus package passed by Congress in 2009 to combat the recession is an example of

In response to the 2008 recession, New Zealand's Finance Minister Bill English stated that "... the 7 billion New Zealand dollars would be allocated to new infrastructure spending, providing financial aid to workers hit by layoffs as the economy slows and includes tax cuts planned for April." www.iht.com, 11/26/2008 New Zealand's government expects the policies to shift the ________ but at this point in time the ________ might weaken its ability to affect real GDP.

If taxes exactly equaled government outlays the

The government's budget deficit or surplus equals the

Suppose the government of Japan increases its expenditure on goods and services. In the short run, this increase will

According to the Laffer curve, raising the tax rate

The aggregate demand curve shifts rightward if there is

Automatic fiscal policy is not subject to all the same time lags to which discretionary fiscal policy is subject.

A discretionary fiscal policy is a fiscal policy that

The purpose of the Employment Act of 1946 was to

Needs-tested spending ________ during recessions and ________ during expansions.

Suppose that real GDP equals potential GDP, but the government believes that the economy is in a below full-employment equilibrium. As a result, the government increases its expenditure on goods and services. In response to the government's fiscal policy

In January 2013 certain tax rates increased, which were predicted to increase the federal government's tax revenue. An increase in tax revenue ________ the government's budget deficit and over time thereby ________ the amount of government debt.

Splitting the fiscal imbalance between the current generation and future generations is called

The government receives tax revenues from several sources. Rank the following sources from largest to the smallest. I. corporate income taxes II. personal income taxes III. Social Security taxes

Prior to the Great Depression, the purpose of the federal budget was to

In October 2008, President Bush enacted the Alternative Minimum Tax Relief Act of 2008, which resulted in lower taxes on labor income. According the supply-side view, this would result in

Fiscal policy includes