Exam 13: Fiscal Policy

An increase in tax rates as a result of a new tax law passed by Congress is an example of ________.

Corporate income taxes are the largest source of revenue for the federal government.

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

A reason the government expenditure multiplier is larger than 1 is because

"Obama Considers Delaying Tax Increase" "U)S. President-elect Barack Obama is considering delaying his proposal to repeal the Bush tax cuts for the wealthiest Americans in light of the economic downturn." Www)nytimes.com 11/23/2008 Obama's possible decision to delay the tax increase recognizes the fact that a tax increase will ________ disposable income and ________ real GDP.

The Council of Economic Advisers

-The government begins year 1 with $25 billion of debt. Based on the information in the above table, what is the amount of debt following year 3?

In October 2008, President Bush enacted the Alternative Minimum Tax Relief Act of 2008, which resulted in lower taxes on labor income. According the supply-side view, this would result in

Suppose the only revenue taken in by the government is in the form of income tax, and the tax rate is 10 percent. If aggregate income is $800 billion, and government outlays are $100 billion, then the government budget has

Rank the following federal government outlays from the largest to the smallest. I.debt interest II.transfer payments III.expenditure on goods and services

What is the Laffer curve? Where on their Laffer curves are the United States, the United Kingdom and France located?

The magnitude of the tax multiplier ________ the magnitude of the government expenditure multiplier.

Fiscal policy involves

-What is the amount of the surplus or deficit incurred in year 4 by the government shown in the above table?

-In the above figure, if the economy initially is at point A and government expenditure increases, in the short run the economy will move to point

"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 The plan is expected to

Suppose the economy is at a short-run equilibrium with real GDP greater than potential GDP. Which of the following fiscal policies would decrease real GDP and the price level?

All developed countries have about the same ratio of government deficit to GDP.

Whenever the federal government spends more than it receives in tax revenue, then by definition it

Comparing the fiscal imbalance for the current generation versus future generations, it is the case that