Exam 18: Fiscal Policy

When an increase in government spending leads to a decrease in private spending it is called:

In the short run,an increase in government spending growth will cause the real GDP growth to:

The case when an increase in government spending isn't large enough to significantly increase aggregate demand is called:

If the economy is hit by a negative real shock that raises inflation and unemployment,which fiscal policy action should the government take in order to keep inflation and unemployment stable?

A problem that makes fiscal policy less effective is that:

When the government sells more bonds,what else happens?

When consumers cut back on spending _____fall(s).

In order for fiscal policy to effectively offset a $1 million decrease in consumer spending,the government would MOST likely have to:

Fiscal policy is MOST effective in keeping both inflation and real growth stable when there is a:

In a typical year,changes in government spending compared to overall spending are relatively:

To keep inflation and GDP growth stable,the government can apply fiscal policy in the presence of a real shock.

Fiscal policy is more effective in affecting economic activity if:

Figure: Aggregate Demand Shifts 2 Refer to the figure.Suppose the economy is initially at point A in the diagram.If a decrease in investment spending causes a shift of the AD curve from AD₁ to AD₂,then the government can avoid a short-run recession by:

When consumers receive tax rebates and use them to pay down debt rather than to increase spending:

When consumers save their tax cut for a future tax increase,they are adhering to:

Bond-financed increases in government spending are MOST likely to be effective when:

Increases in government spending financed through additional borrowing will typically:

Which of these is a form of fiscal policy?

The stimulus plan passed under President Obama in 2009 increased government spending and cut taxes by nearly $900 billion,but unemployment still remained above 9% for nearly two years.

A government can finance its spending by: