Exam 18: Fiscal Policy

Suppose the unemployed are mostly construction workers by profession.Which government spending project will MOST effectively target unused labor resources?

As the government builds new schools,the construction workers and material vendors employed on the project spend more in the community where they live.What is the economic term for this effect?

Which of the following limits the effectiveness of fiscal policy?

Imagine an economy in a recession resulting from a decrease in consumer spending.In the best case scenario,increased government spending to fight the recession would:

Discuss the four major limits to fiscal policy.

Which statement is NOT a major limit to the effectiveness of fiscal policy?

When Ricardian equivalence holds,a tax cut:

If an increase in government spending of $100 million causes an increase in aggregate spending of less than $100 million,we call this phenomenon:

In September 2010,after most of the funds from the American Recovery and Reinvestment Act of 2009 had been spent:

Automatic stabilizers help fiscal policy automatically keep private spending lower during bad economic times.

The time necessary to determine that an economic problem exists is called the:

President Obama's fiscal policy response to the 2008 recession involved changes in:

Ricardian equivalence occurs when:

One way the government can use fiscal policy to fight a recession is to:

In a recession,automatic stabilizers cause:

Increases in government spending do little to change long-run economic growth.

Fiscal policy is most effective when people are otherwise unwilling to spend money.

An increase in government spending stimulates income and thus also increases personal consumption.

The U.S.federal government fought the 2007-2009 recession with a nearly $900 billion fiscal stimulus spread over 3 to 4 years.At its peak,the stimulus was equivalent to about _____ of annual GDP.

The crowding out effect of fiscal policy refers to: