Exam 18: Fiscal Policy

It is ________ difficult to effectively time fiscal policy than monetary policy because ________.

A study by Edward Prescott found that the ________ marginal tax rates in the United States relative to Europe resulted in a ________ quantity of labor supplied in the United States.

Table 18-1 Year Potential Real GDP Real GDP Price Level 2018 \ 18.0 trillion \ 18.0 trillion 150 2019 18.5 trillion 18.2 trillion 152 -Refer to Table 18-1.Consider the hypothetical information in the table above for potential real GDP,real GDP,and the price level in 2018 and in 2019 if Congress and the president do not use fiscal policy.If Congress and the president want to keep real GDP at its potential level in 2019,they should

An increase in the tax wedge associated with a given economic activity will decrease the level of that activity.

A change in consumption spending caused by income changes is ________ change in spending,and a change in government spending that occurs to improve roads and bridges is ________ change in spending.

Which of the following is an objective of fiscal policy?

In the long run,most economists agree that a permanent increase in government spending leads to

The majority of dollars spent by government prior to the Great Depression was spending at the ________.In the post World War II period,two-thirds to three quarters of all dollars spent by government in the United States are spent at the ________.

Following a decrease in government spending,as the price level falls we would expect the level of interest rates to ________ and investment to ________.

Crowding out will be greater

Figure 18-10 -Refer to Figure 18-10.In the graph above,suppose the economy in Year 1 is at point A and is expected in Year 2 to be at point B.Which of the following policies could Congress and the president use to move the economy to point C?

The Trump administration's policies to increase labor productivity growth include all of the following except

The Congressional Budget Office estimates the size of the tax multiplier to be ________ for a 2-year tax cut for lower- and middle-income people.

The aggregate demand curve will shift to the right ________ the initial increase in government purchases.

The federal government debt as a percentage of GDP fell

Which of the following is the largest category of federal government expenditures?

Crowding out refers to a decline in ________ as a result of an increase in ________.

The federal government debt equals

If the federal government's expenditures are less than its tax revenues,then

The income tax system serves as an automatic stabilizer over the course of the business cycle.