Exam 18: Fiscal Policy

Fiscal policies that help an economy in a recession without deliberate actions by policymakers are called:

Fiscal policy is MOST effective when:

In 2011,most of the 2009 federal stimulus package had been spent,but the unemployment rate remained exceptionally high at nearly 10%.This is an example of the:

The time necessary for Congress to propose and pass a fiscal policy plan is called the:

Which statement pertains to the condition of crowding out?

The worst case for fiscal policy is when a recession is caused by a real shock.

An increase in government spending growth will cause the LRAS curve to:

The tools of fiscal policy are government expenditure and taxation.

When the U.S.government sells bonds,bond prices:

The decrease in private spending that occurs when the government increases spending is called:

Government spending is a more effective policy tool when:

Explain the dilemma policymakers face with respect to fiscal policy when government deficits and the national debt reach burdensome levels.

According to the AD-AS model,the economy always returns to its long-run potential growth rate in the long run.Why then should government intervene and do anything when the economy suffers a negative aggregate demand shock and falls into a recession?

Fiscal policy will be most effective when people are keen to spend their money.

President Bush favored increases in government spending as a way to stimulate the economy,while President Obama favors tax cuts.

Other things equal,will a temporary individual tax rebate or a permanent individual tax rebate provide the largest increase in aggregate demand?

The multiplier concept is important because it shows:

Regarding fiscal stimulus,Republicans tend to favor _____;Democrats tend to favor _____.

If Ricardian equivalence holds,then a $100 million tax cut financed by issuing government bonds means that:

Which does NOT explain when fiscal policy is most likely to matter?