Exam 11: Fiscal Policy.

If fiscal policy makers increase aggregate demand in an attempt to decrease the unemployment rate below the natural rate of unemployment, then _____

At the onset of the Great Depression, U.S. federal outlays were only about _____ relative to GDP.

How much did the federal debt grow between 2008 and 2014?

The existence of stagflation in the 1970s undermined the credibility of demand-management policies.

The introduction of a tax by the government will _____

Suppose the federal government increases the unemployment benefits financed by higher income taxes. In this case, which of the following is likely to occur?

During 1998-2001, as a result of increased taxes and reduced federal spending, the federal surplus _____

When government purchases increase, the spending multiplier indicates the _____

Because of automatic stabilizers, disposable income varies proportionately less than real GDP during periods of economic fluctuations.

If policy makers think the natural rate of unemployment is lower than it really is, then their policies designed to move the economy to the estimated natural rate, if continued over the long run, will _____

When spending by the federal government exceeds net taxes, _____

Which of the following would increase aggregate demand?

During the 1970s, demand-management policy _____

A new tax introduced by the government will _____

Large federal budget deficits of the 1980s and 1990s _____

Suppose an initial increase in government expenditure increases output by $50,000. If the economy is producing at its potential, what is the size of the multiplier?

Which of the following factors did not contribute to the federal budget surpluses in the 1990s?

The passage of the Employment Act of 1946 assigned _____

What do advocates of the American Recovery and Reinvestment Act argue?

According to classical economists, government intervention is _____