Question 1

All of the following are part of fiscal policy EXCEPT

Accepted Answer

A)  setting tax rates. 
B)  setting government spending. 
C)  choosing the size of the government deficit. 
D)  controlling the money supply. 
A)  setting tax rates. 
B)  setting government spending. 
C)  choosing the size of the government deficit. 
D)  controlling the money supply.

Question 2

What is the difference between budget surplus, budget deficit and a balanced budget? Which of these three budget outcomes is currently the case in the United States?

Accepted Answer

A budget surplus occurs if tax revenues

Question 3

The ________ the interest rate, the ________ the present value of a given future amount.

Accepted Answer

A)  higher; larger 
B)  lower; smaller 
C)  lower; larger 
D)  indeterminate from the information given 
A)  higher; larger 
B)  lower; smaller 
C)  lower; larger 
D)  indeterminate from the information given

Question 4

-Comparing the U.S. budget position for 2014 to the rest of the world, we see that as a percentage of GDP, the ________ than in most other countries.

Accepted Answer

A)  U.S. budget deficit is smaller 
B)  U.S. budget deficit is larger 
C)  U.S. budget surplus is smaller 
D)  U.S. budget surplus is larger 
A)  U.S. budget deficit is smaller 
B)  U.S. budget deficit is larger 
C)  U.S. budget surplus is smaller 
D)  U.S. budget surplus is larger

Question 5

In response to the economic downturn, New Zealand's government had enacted a $3.8 stimulus package.
Www)iht.com, 11/26/2008
The stimulus plan is considered

Accepted Answer

A)  automatic fiscal policy. 
B)  contractionary fiscal policy. 
C)  discretionary fiscal policy. 
D)  needs-tested spending. 
A)  automatic fiscal policy. 
B)  contractionary fiscal policy. 
C)  discretionary fiscal policy. 
D)  needs-tested spending.

Question 6

During the Reagan administration in the 1980s, tax rates were ________ and the budget deficit ________.

Accepted Answer

A)  raised; increased 
B)  raised; decreased 
C)  cut; increased 
D)  cut; decreased 
A)  raised; increased 
B)  raised; decreased 
C)  cut; increased 
D)  cut; decreased

Question 7

The stimulus package passed by Congress in 2009 to combat the recession is an example of

Accepted Answer

A)  automatic fiscal policy. 
B)  discretionary fiscal policy. 
C)  monetary policy. 
D)  increased taxation. 
A)  automatic fiscal policy. 
B)  discretionary fiscal policy. 
C)  monetary policy. 
D)  increased taxation.

Question 8

A budget surplus occurs when government

Accepted Answer

A)  outlays exceeds tax revenues. 
B)  tax revenues exceeds outlays. 
C)  tax revenues equals outlays. 
D)  tax revenues equal Social Security expenditures. 
A)  outlays exceeds tax revenues. 
B)  tax revenues exceeds outlays. 
C)  tax revenues equals outlays. 
D)  tax revenues equal Social Security expenditures.

Question 9

Using fiscal policy, to increase real GDP and employment the government could ________ government expenditure on goods and services or ________ taxes.

Accepted Answer

A)  increase; increase 
B)  increase; decrease 
C)  decrease; increase 
D)  decrease; decrease 
A)  increase; increase 
B)  increase; decrease 
C)  decrease; increase 
D)  decrease; decrease

Question 10

Generational accounting does NOT investigate issues involving

Accepted Answer

A)  the budget deficit. 
B)  government obligations such as Social Security. 
C)  the ownership of corporate stock. 
D)  the burden of taxes. 
A)  the budget deficit. 
B)  government obligations such as Social Security. 
C)  the ownership of corporate stock. 
D)  the burden of taxes.

Question 11

A tax cut decreases government saving and can thereby crowd out investment.

Accepted Answer

A) True 
 B)False

Question 12

In early 2013, economists predicted that the U.S. economy would grow more rapidly than had been predicted. If this prediction comes true, then the cyclical deficit will ________ than had been predicted.

Accepted Answer

A)  shrink more rapidly 
B)  shrink more slowly 
C)  increase more slowly 
D)  None of the above are correct because the growth of the economy does not affect the size of the cyclical deficit. 
A)  shrink more rapidly 
B)  shrink more slowly 
C)  increase more slowly 
D)  None of the above are correct because the growth of the economy does not affect the size of the cyclical deficit.

Question 13

If the government raises taxes on labor income and interest income, explain how potential GDP and economic growth are affected.

Accepted Answer

Tax increases on labor income decrease t

Question 14

-The table above has data for a country's government budget. The data show the government is running a ________ billion.

Accepted Answer

A)  budget surplus of $300 
B)  budget deficit of $375 
C)  budget deficit of $550 
D)  budget surplus of $650 
A)  budget surplus of $300 
B)  budget deficit of $375 
C)  budget deficit of $550 
D)  budget surplus of $650

Question 15

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

Accepted Answer

A)  government outlays exceed what it receives in taxes. 
B)  government receipts exceed government outlays. 
C)  government spends money on things which do not produce revenue, such as schools. 
D)  economy goes into a recession. 
A)  government outlays exceed what it receives in taxes. 
B)  government receipts exceed government outlays. 
C)  government spends money on things which do not produce revenue, such as schools. 
D)  economy goes into a recession.

Question 16

An example of a discretionary fiscal policy is when

Accepted Answer

A)  tax receipts fall as incomes fall. 
B)  unemployment compensation payments rise with unemployment rates. 
C)  food stamp payments rise when the economy is in a recession. 
D)  Congress passes a law that raises marginal tax rates. 
A)  tax receipts fall as incomes fall. 
B)  unemployment compensation payments rise with unemployment rates. 
C)  food stamp payments rise when the economy is in a recession. 
D)  Congress passes a law that raises marginal tax rates.

Question 17

The federal government debt is equal to the

Accepted Answer

A)  obligations of benefits from federal taxes and expenditures. 
B)  sum of all annual federal government outlays. 
C)  sum of past budget deficits minus the sum of past budget surpluses. 
D)  annual difference between federal government tax revenues and outlays. 
A)  obligations of benefits from federal taxes and expenditures. 
B)  sum of all annual federal government outlays. 
C)  sum of past budget deficits minus the sum of past budget surpluses. 
D)  annual difference between federal government tax revenues and outlays.

Question 18

In 2007, Germany increased the value added tax (VAT)on consumption from 16 percent to 19 percent. The supply-side view, this will

Accepted Answer

A)  increase the tax wedge and lower the incentive to work. 
B)  decrease the tax wedge and lower the incentive to work. 
C)  shift the labor supply curve to the right. 
D)  increase the incentive to work in order to pay the higher tax. 
A)  increase the tax wedge and lower the incentive to work. 
B)  decrease the tax wedge and lower the incentive to work. 
C)  shift the labor supply curve to the right. 
D)  increase the incentive to work in order to pay the higher tax.

Question 19

-The table above has data for a country's government budget. The country has government revenues of ________ billion.

Accepted Answer

A)  $900 
B)  $1125 
C)  $725 
D)  $2100 
A)  $900 
B)  $1125 
C)  $725 
D)  $2100

Question 20

Generational accounting shows that the present value of the government's commitments to pay benefits are ________ the present value of its taxes.

Accepted Answer

A)  greater than 
B)  less than 
C)  equal to 
D)  not comparable to 
A)  greater than 
B)  less than 
C)  equal to 
D)  not comparable to

All of the following are part of fiscal policy EXCEPT

What is the difference between budget surplus, budget deficit and a balanced budget? Which of these three budget outcomes is currently the case in the United States?

The the interest rate, the the present value of a given future amount.

-Comparing the U.S. budget position for 2014 to the rest of the world, we see that as a percentage of GDP, the ________ than in most other countries.

In response to the economic downturn, New Zealand's government had enacted a $3.8 stimulus package. Www)iht.com, 11/26/2008 The stimulus plan is considered

During the Reagan administration in the 1980s, tax rates were and the budget deficit .

The stimulus package passed by Congress in 2009 to combat the recession is an example of

A budget surplus occurs when government

Using fiscal policy, to increase real GDP and employment the government could government expenditure on goods and services or taxes.

Generational accounting does NOT investigate issues involving

A tax cut decreases government saving and can thereby crowd out investment.

In early 2013, economists predicted that the U.S. economy would grow more rapidly than had been predicted. If this prediction comes true, then the cyclical deficit will ________ than had been predicted.

If the government raises taxes on labor income and interest income, explain how potential GDP and economic growth are affected.

-The table above has data for a country's government budget. The data show the government is running a ________ billion.

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

An example of a discretionary fiscal policy is when

The federal government debt is equal to the

In 2007, Germany increased the value added tax (VAT)on consumption from 16 percent to 19 percent. The supply-side view, this will

-The table above has data for a country's government budget. The country has government revenues of ________ billion.

Generational accounting shows that the present value of the government's commitments to pay benefits are ________ the present value of its taxes.

What Is Economics?

The Economic Problem

Demand and Supply

Measuring GDP and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers

The Business Cycle, Inflation, and Deflation

Monetary Policy

International Trade Policy

Filters

Exam 13: Fiscal Policy

All of the following are part of fiscal policy EXCEPT

What is the difference between budget surplus, budget deficit and a balanced budget? Which of these three budget outcomes is currently the case in the United States?

The ________ the interest rate, the ________ the present value of a given future amount.

-Comparing the U.S. budget position for 2014 to the rest of the world, we see that as a percentage of GDP, the ________ than in most other countries.

In response to the economic downturn, New Zealand's government had enacted a $3.8 stimulus package. Www)iht.com, 11/26/2008 The stimulus plan is considered

During the Reagan administration in the 1980s, tax rates were ________ and the budget deficit ________.

The stimulus package passed by Congress in 2009 to combat the recession is an example of

A budget surplus occurs when government

Using fiscal policy, to increase real GDP and employment the government could ________ government expenditure on goods and services or ________ taxes.

Generational accounting does NOT investigate issues involving

A tax cut decreases government saving and can thereby crowd out investment.

In early 2013, economists predicted that the U.S. economy would grow more rapidly than had been predicted. If this prediction comes true, then the cyclical deficit will ________ than had been predicted.

If the government raises taxes on labor income and interest income, explain how potential GDP and economic growth are affected.

-The table above has data for a country's government budget. The data show the government is running a ________ billion.

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

An example of a discretionary fiscal policy is when

The federal government debt is equal to the

In 2007, Germany increased the value added tax (VAT)on consumption from 16 percent to 19 percent. The supply-side view, this will

-The table above has data for a country's government budget. The country has government revenues of ________ billion.

Generational accounting shows that the present value of the government's commitments to pay benefits are ________ the present value of its taxes.

What Is Economics?

The Economic Problem

Demand and Supply

Measuring GDP and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers

The Business Cycle, Inflation, and Deflation

Monetary Policy

International Trade Policy

Filters

The the interest rate, the the present value of a given future amount.

During the Reagan administration in the 1980s, tax rates were and the budget deficit .

Using fiscal policy, to increase real GDP and employment the government could government expenditure on goods and services or taxes.