Exam 15: Fiscal Policy

"Lower marginal tax rates encourage people to work,save,and invest,resulting in more output and a larger tax base." This statement most closely reflects which of the following schools of economic thought?

According to Keynesian economics,what impact would a balanced budget amendment to our constitution have on our national economy?

Which of the following groups believes that the economy can achieve full employment without inflation through tax reductions,lower resource prices,and deregulation?

Fiscal policy is the management of aggregate demand through changes in taxes and government spending.

When the economy enters a recession,automatic stabilizers create:

If your income increases from $40,000 to $48,000 and your consumption increases from $35,000 to $39,000,your marginal propensity to consume (MPC)is:

When an economy is operating below its potential capacity,Keynesian economists argue that:

The greater the marginal propensity to consume in the economy,the smaller the spending multiplier.

Supply-side fiscal policies focus on improving the incentives to work,save,and invest.

If consumption is $800 when income is $1,000,the marginal propensity to consume (MPC)must be 0.80.

Fiscal policy is the manipulation of government spending and taxes.

If the marginal propensity to consume (MPC)is 0.50,the value of the spending multiplier is:

The spending multiplier is:

An advantage of automatic stabilizers is that this type of fiscal policy is not subject to:

Which of the following would most likely occur if the federal government increased its spending and enlarged the size of the budget deficit during a period of full employment?

The Keynesian analysis of fiscal policy argues that:

Which of the following statements is true?

Income tax collections:

The Laffer curve is representative of which of the following schools?

Supply-side economic policies are designed to shift the aggregate supply curve to the left,whereas Keynesian economic policies focus on shifting the aggregate demand curve to the right during recessions and to the left during economic expansions.