Exam 17: Fiscal Policy

Which of the following would not be considered an indirect tax?

Which of the following constitutes a transfer payment?

The figure given below depicts the macroeconomic equilibrium in a country. Figure 11.3 Suppose an economy is in equilibrium.Also suppose that consumer expectations change as the threat of war increases the likelihood of an increase in taxes.This would result in:

Identify the correct statement.

The figure given below shows the macroeconomic equilibria of a country. Figure 11.1 Refer to Figure 11.1.If the economy is in equilibrium at point C, then, other things equal, an increase in government spending will:

If the price level falls as real GDP decreases, the multiplier effects of any given change in aggregate expenditures are smaller than they would be if the price level remained constant.

Which of the following is true of fiscal policy before the Great Depression of the 1930s?

In the presence of the crowding out effect, the purchase of Treasury bonds by the government will result in:

Which of the following correctly explain Ricardian equivalence?

The reduction in the U.S.government deficit in the early 1990s was the result of strong economic growth.

The ratio of U.S.government spending to GDP reached its peak during:

The flatter the aggregate supply curve, the less the amount of government spending necessary to close a $1 billion GDP gap.

The _____ is the difference between potential real GDP and the equilibrium level of real GDP.

Transfer payments that use income to establish eligibility act as automatic stabilizers.

Which of the following statements is true of government spending?

Government spending equals the sum of _____, _____, and _____.

Most industrial countries have adopted the regressive tax system.

If Joe earns $80, 000 per year and pays $20, 000 in taxes, while Moe earns $100, 000 and pays $22, 000 in taxes, their tax system would best be described as:

An increase in deficit spending tends to raise interest rates, thereby resulting in a multiplier effect that is higher than would be associated with an equivalent increase in consumption spending.

According to Ricardian equivalence, taxation and government borrowing have the same effect on spending in the private sector.