Exam 13: Fiscal Policy

Between 2000 and 2005, Finland increased its tax on interest income. As a result, the supply curve for loanable funds shifted ________ and the tax wedge ________.

If tax receipts are greater than government outlays the government has a budget surplus.

During the Reagan administration in the 1980s, tax rates were ________ and the budget deficit ________.

Depending on the relative size of the federal government's outlays and tax receipts, the federal government's budget can be in three possible conditions. What are the three possible conditions and what is the relationship of federal government outlays and tax receipts for each?

The government begins year 1 with $25 billion of debt. Based on the information in the above table, what is the amount of debt following year 1?

-The above table gives a country's government outlays and tax receipts for 2014 through 2018. During which years did the country have a balanced budget, budget surplus, and budget deficit?

"European Economic Recovery Plan" "The European Commission urged EU governments to jointly combat the economic slowdown with 200 billion euros ($256 billion) in spending and tax cuts to boost growth and consumer and business confidence." The plan "...would see the 27 EU governments spend 1.5 percent of the bloc's gross domestic product to halt the slowdown that has already pushed some European nations into recession." Www)iht.com, 11/26/2008 The plan is expected to

Suppose real GDP exceeds potential GDP. If the government decreases its expenditures on goods and services, then real GDP ________ and the price level ________.

In January 2008, the unemployment rate was only 4.9 percent and real GDP was growing. But President Bush "acknowledged that Americans were 'anxious about the economy'." As a result, it was reported that "...the Bush administration and Congressional leaders, increasingly concerned about a possible recession, are moving closer to agreeing that an economic stimulus package is needed soon." In order for the package to be approved, the leaders in Washington implied that "... they might be able to put aside longstanding partisan differences." www.nytimes.com 1/12/2008 Which of the following lags are government officials trying to avoid?

Which of the following is NOT a revenue source for the Federal government?

If the government wants to engage in fiscal policy to increase real GDP, it could

-Using the above figure, if full employment occurs at $19 trillion and the economy is actually producing $19 trillion, then there is a

Which of the following policies shifts the AD curve the farthest leftward?

In order for the United States to repay its international debt, the United States would need to

Taking account of the supply-side effects, a tax cut on labor income ________ employment and ________ potential GDP.

An increase in the tax on interest income ________ the supply of loanable funds and ________ the equilibrium investment.

The gross public debt was approximately $6 trillion in 2002 and approximately $16 trillion in 2012. These numbers definitely indicate that in the 10 years between 2002 and 2012

An increase in taxes on labor income decreases potential GDP.

An increase in the income tax rate ________ employment and ________ potential GDP.

"Obama Considers Delaying Tax Increase" "U.S. President-elect Barack Obama is considering delaying his proposal to repeal the Bush tax cuts for the wealthiest Americans in light of the economic downturn." Www)nytimes.com 11/23/2008 Obama's possible decision to delay the tax increase recognizes the fact that a tax increase will ________ disposable income and ________ real GDP.