Exam 7: Fiscal Policy

Below is some data for a hypothetical economy: -Refer to the information above to answer this question.Suppose the economy is presently in equilibrium.If the government increases its spending by the amount of its current surplus/deficit,what will be the result?

What are the major expenses for the Government of Canada?

Which of the following is not part of a cyclically-balanced-budget fiscal policy?

Below is some information about the state of the budget and the economy. 1.A budget deficit and a recessionary gap. 2.A budget deficit and an inflationary gap. 3.A budget surplus and a recessionary gap. 4.A budget surplus and an inflationary gap. -Refer to the information above to answer this question.When would a balanced-budget fiscal policy be counter-cyclical?

Which of the following is a legitimate concern over the national debt?

Counter-cyclical fiscal policy aimed at closing an inflationary gap is illustrated graphically by the aggregate demand curve shifting to the left.

When does a government budget surplus exist?

Suppose the government Daikai balances its budget over a five-year period.Autonomous taxes are $50 and the marginal tax rate is 25%.The following table shows the level of GDP and government expenditure in each of the first 5 years: a)Fill in column (4)and (5).Suppose the level of GDP for Year 5 is $380 million. b)What level of government spending in Year 5 will balance the budget over the five-year cycle? c)What level of autonomous taxes in Year 5 will balance the budget over the five-year cycle? a)

Below is some data for a hypothetical economy: -Refer to the information above to answer this question.If government decreased both its spending and taxes by $45,how would equilibrium GDP change?

Which of the following is true if the government attempts to balance its budget when the economy is in a recession and the government is running a budget deficit?

A decrease in autonomous taxes would pivot the NTR line down.

All of the following,except one,are arguments against the use of counter-cyclical fiscal policy to close a recessionary gap.Which is the exception?

If the government used counter-cyclical policy to eliminate an inflationary gap,what should it do?

Which of the following is not an automatic stabilizer?

Which of the following would close an inflationary gap?

All of the following,except one,are outlays categories in the federal government's budget plan.Which is the exception?

What is fiscal policy?

A decrease in government spending on goods and services will shift the budget line up.

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

What effect will an expansionary fiscal policy have on interest rates and the exchange rate?