Exam 7: Fiscal Policy

Given the following data for the economy of Mokka: a)Calculate equilibrium GDP. b)Calculate the multiplier. c)If the tax function is: T = 30 + 0.2Y,calculate the government's budget balance. d)Now change government spending by the amount of the surplus or deficit in an attempt to balance the budget.What will be the new equilibrium GDP? e)What is the budget balance at the new equilibrium?

Which of the following is not a likely outcome of counter-cyclical fiscal policy?

What determines the state of the government's budget?

What will be the effect on the multiplier of a decrease in autonomous taxes?

What has been happening to the Canadian National debt since WW II? To the debt/GDP ratio?

What is true about the national debt since the 1960s until the 1990s?

What are the three schools of thought on fiscal policy?

What is the result of using balanced-budget fiscal policy when both a recessionary gap and a budget deficit exist?

Graphically,what would cause the aggregate demand curve to shift to the right?

Which of the following statements concerning a budget deficit is true?

Suppose an economy is in a recession and the government is experiencing a budget deficit. What will be a possible effect of the government's decision to borrow money in order to increase spending and real GDP?"

Suppose that the economy is experiencing both an inflationary gap and a budget surplus.Which of the following is true?

Assume that the economy is in a recession and has a balanced budget.If the government increases its spending to reduce unemployment,what will happen to GDP and the government's budget?

Those who advocate a balanced budget fiscal policy would agree with all but one of the following statements.Which is the exception?

What are automatic stabilizers? How do they work?

To whom does the federal government owe most of its debt?

All of the following,except one,are correct statements.Which is the exception?

Below is some data for a hypothetical economy: -Refer to the information above to answer this question.What is the value of the government's budget at equilibrium income?

Assume that in the economy of Utrea,the MPC is 0.8 and the multiplier is 3 and that both government spending and autonomous taxes are increased by $40.In what direction and by how much will equilibrium GDP change?

In 2015,in Canada,what percentage of the national debt was owned by foreigners?