Exam 16: Fiscal Policy

Which of the following is an appropriate discretionary fiscal policy if equilibrium real GDP falls below potential real GDP?

If tax reduction and simplification are effective,then

A tax rebate,like the one issued in 2008,is likely to ________ consumption spending ________ than would a permanent tax cut.

The growth rate of real GDP equals

Government deficits tend to increase during

President Trump's proposed increase in spending on infrastructure projects is an example of discretionary fiscal policy aimed at increasing

The crowding out of private spending by government spending will be greater the

The use of fiscal policy to stabilize the economy is limited because

When President Obama took office in January 2009,he pledged to pursue an expansionary fiscal policy to try to pull the economy out of the recession.The next month,Congress passed the American Recovery and Reinvestment Act of 2009,an $840 billion package of spending increases and tax cuts that was

Calculate the government purchases multiplier if the marginal propensity to consume equals 0.8,the tax rate is 0.1,and the marginal propensity to import equals 0.2.

Figure 16-6 -Refer to Figure 16-6.In the dynamic model of AD-AS in the figure above,if the economy is at point A in year 1 and is expected to go to point B in year 2,and no fiscal or monetary policy is pursued,then at point B

The aggregate demand curve will shift to the right ________ the initial decrease in taxes.

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

From an initial long-run equilibrium,if aggregate demand grows faster than long-run and short-run aggregate supply,then Congress and the president would most likely

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

Suppose the government wants to maintain a balanced budget.To achieve this goal,when the economy falls into recession government would need to ________ taxes,which would cause aggregate demand to ________.

Decreasing government spending ________ the price level and ________ equilibrium real GDP.

What is fiscal policy,and who is responsible for fiscal policy?

In 2017,the Congressional Budget Office forecast that real GDP would grow at an average annual rate of ________ for the years 2017-2027.

The federal budget exhibited a $128.7 billion surplus in 2001 but moved to a deficit of $157.8 billion in 2002.Some argued the deficit was opened up because of the Bush 2001 tax cuts,but others argued that the deficit grew because of the recession suffered in 2001.Evaluate the validity of the second argument.