Exam 13: Fiscal Policy

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

The supply side effects of a change in taxes on labor income means that ________ in taxes on labor income shift the ________.

Deliberate changes in government expenditures and taxes to influence GDP

How can discretionary fiscal policy be used to close a recessionary gap?

An increase in taxes on labor income shifts the labor supply curve leftward and the after-tax wage rate falls.

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

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?

"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 Which of the following describe the EU's plan? i. It is discretionary fiscal policy iI. It will generate a cyclical surplus.

Tax revenues ________ during recessions and ________ during expansions.

-The figure above shows tax revenues and government expenditures in the economy of Meadowlake.Potential GDP is $13 trillion.If real GDP is $13 trillion,then the government has a ________.

During an expansion,tax revenues ________ and government transfer payments ________.

Suppose the government increases taxes.One effect of this change is that it decreases

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

Beginning in 2013,Americans will pay an additional Medicare tax of 0.9 percent on all wage income that exceeds $200,000.By increasing the amount the current generation pays for Medicare,this tax ________ the generational imbalance.

By definition,a government budget deficit is the situation that occurs when the

In 2008,Britain decided to cut its value added tax (VAT) to 15 percent from 17.5 percent. The VAT is similar to a sales tax.According to the supply-side view,this change will increase I. the after-tax wage II) the incentive to work III) the supply of labor

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

In 2007,Denmark's government had expenditures of $157 billion and spending of $171 billion. GDP in 2007 was $312 billion. The government ran a budget ________ and government debt ________.

What is fiscal policy and what are its purposes?

The structural deficit is the deficit that occurs when