Exam 15: Fiscal Policy

A combination of stagnant real GDP and inflation is known as:

An economy's total government debt at the end of 2017 is $10 trillion. In 2018, the government spends $2 trillion, and its debt at the end of 2018 is $9 trillion. How much revenue did the government collect in taxes in 2018?

Use Figure: Fiscal Policy II. If the economy is operating at point A, then there is _____ gap, and the government should use _____ fiscal policy to close this gap. ​ Fiscal Policy II

If the short-run aggregate supply curve intersects the aggregate demand curve to the left of the long-run aggregate supply curve, then the economy has _____ gap, and the government can close the gap by _____ taxes.

Which of the following would constitute an expansionary supply-side fiscal policy?

Suppose that the total debt of the U.S federal government at the end of 2016 was $18 trillion and during 2017 the government runs a budget deficit of $1.5 trillion. The tax revenue of the government was _____ than spending, and the debt at the end of 2017 was:

If the full employment level of output for an economy is 1,000 units and it is currently producing 900 units, then there is _____ gap, and _____ fiscal policy can be used to close the gap.

The delay between the onset of a problem and the realization that it exists is known as _____ lag.

If the government spending is _____ than the tax revenue, then the government has a budget surplus. In this case, the overall debt of the government will:

If there is an inflationary gap in the economy, then it is producing _____ than its full employment level of output, and the government can _____ taxes to close the gap.

There is a widespread agreement among economists that:

Suppose that it takes 40 days for the government to realize that it is in a recession. Further, it takes the government 42 days to implement an expansionary fiscal policy and an additional 30 days for the expansionary policy to show any effect. Given this, the implementation lag is _____ days, and the outside lag is _____ days.

All else equal, the presence of automatic stabilizers implies that budget deficits will _____ during recessions and _____ during expansions.

If the short-run aggregate supply curve intersects the aggregate demand curve to the left of the long-run aggregate supply curve, then the economy has _____ gap, and the government can close the gap by _____ transfer payments.

Suppose that it takes 40 days for the government to realize that it is in a recession. Further, it takes the government 42 days to implement an expansionary fiscal policy and an additional 30 days for the expansionary policy to show any effect. Given this, the recognition lag is _____ days, and the outside lag is _____ days.

Suppose that it takes 40 days for the government to realize that it is in a recession. Further, it takes the government 42 days to implement an expansionary fiscal policy and an additional 30 days for the expansionary policy to show any effect. Given this, the recognition lag is _____ days, and the implementation lag is _____ days.

An economy's total government debt at the end of 2017 is $10 trillion. In 2018, the government spends $2 trillion, and its tax revenue is $1 trillion. What will be the government debt at the end of 2018?

According to monetarist theory, inflation is a result of:

Stagflation refers to inflation and stagnant:

The delay between a change in policy in response to a recession and the resulting effect on the economy is known as the _____ lag.