Exam 12: Fiscal Policy

Which of the following is consistent with what Keynes believed?

Fiscal stimulus is most effective in changing the level of real output without causing inflation when the aggregate supply curve is:

A budget deficit is incurred whenever:

Fiscal stimulus includes all of the following except:

If the value of the dollar plummets in international currency markets,initially this causes foreigners to buy more American goods.Which of the following indicates the appropriate change in the U.S.economy?

Figure 12.1: -Assuming aggregate demand is represented by AD₁,the economy depicted in Figure 12.1 confronts a real GDP gap of:

A budget deficit occurs if government spending:

An improvement in consumer confidence will cause:

The Tax Equity and Fiscal Responsibility Act of 1982 increased taxes in an effort to reduce inflationary pressure.Which of the following indicates the appropriate change in the U.S.economy?

The GDP gap is:

Fiscal restraint will definitely occur if the government:

In a graph of the aggregate demand curve,a decrease in investment by businesses is represented by a:

If the aggregate supply curve is upward sloping,an increase in aggregate demand will cause an increase in output and no change in prices.

Most of the countries in the world suffered long and deep losses of output and employment between 1930 and 1935,which in turn meant fewer purchases of U.S.goods and services.Which of the following indicates the appropriate change in the U.S.economy?

Discuss why Aggregate demand falls when people buy more imports,ceteris paribus.

Inflation occurs when:

Which of the following economies has the largest multiplier?

If the federal government uses its budget to shift aggregate demand in an attempt to manage the macroeconomy,it is likely that the budget will:

Which of the following helps explain the multiplier effect?

A tax cut is likely to cause: