Exam 12: Fiscal Policy

If an increase in government spending causes an increase in government borrowing, this could induce

Which of the following fiscal policy actions would be appropriate if the economy is experiencing an inflationary gap?

If there is a dollar-for-dollar direct expenditure offset, then

To the extent that the political process of moving legislation through Congress is slow

All the following actions represent fiscal policy EXCEPT

Supply-side economists argue that decreasing marginal tax rates

The time required to acquire information about the state of the economy is referred to as

When real Gross Domestic Product (GDP)falls, which of the following will automatically occur?

When there is an interval between when the fiscal policy changes and corresponding changes in aggregate spending, we have a(n)

Suppose policy makers pass a budget that results in a reduction in government spending and no change in taxes. This reduction in government spending will likely

Government-provided unemployment insurance is an example of

In 2009, Congress passed a bill that involved government spending increases and tax cuts with the purpose of stimulating the U.S. economy. This policy is an example of

What do automatic stabilizers attempt to stabilize?

According to supply-side economists, lower marginal tax rates will not necessarily lead to lower tax revenues because

Discretionary fiscal policy is

Keynes believed that the way to prevent recessions and depressions was to

Discretionary fiscal policy is best described as

The notion that a decline in tax rates and other incentives will spur individuals and firms to increase productivity is typically referred to as

-Refer to the above figure. If the relevant aggregate demand curve is AD₁, then the economy is experiencing

Expansionary fiscal policy is used to