Question 1

In the United States for the year 2010, the federal government had a ________ so the national debt was ________.

Accepted Answer

A)   budget deficit; increasing
B)   balanced budget; not changing
C)   budget surplus; decreasing
D)   budget deficit; decreasing
E)   budget surplus; increasingF) C) and D)
G) B) and D)

Question 2

When the economy is in a recession, ________ taxes decrease while ________ spending increases and, as a result of this automatic fiscal policy, aggregate demand ________.

Accepted Answer

A)   needs-tested; induced; decreases
B)   induced; needs-tested; increases
C)   induced; discretionary; is not changed
D)   discretionary; needs-tested; increases
E)   discretionary; induced; is not changedF) D) and E)
G) All of the above

Question 3

-An economy is at a short-run equilibrium as illustrated in the above figure.An appropriate fiscal policy option to move the economy to full employment is to increase

Accepted Answer

A)   government expenditure and move the economy to a full-employment equilibrium at point c.
B)   tax rates and move the economy to a full-employment equilibrium at point c.
C)   government expenditure and move the economy to a full-employment equilibrium at point b.
D)   tax rates and move the economy to a full-employment equilibrium at point b.
E)   lower the interest rate by increasing the quantity of money and move the economy to a full-employment equilibrium at point b.F) A) and E)
G) A) and C)

Exam 16: Fiscal Policy

-An economy is at a short-run equilibrium as illustrated in the above figure.An appropriate fiscal policy option to move the economy to full employment is to increase

Correct Answer
verified

In the United States for the year 2010, the federal government had a so the national debt was .

Correct Answer
verified

When the economy is in a recession, taxes decrease while spending increases and, as a result of this automatic fiscal policy, aggregate demand .

Correct Answer
verified

Exam 16: Fiscal Policy

-An economy is at a short-run equilibrium as illustrated in the above figure.An appropriate fiscal policy option to move the economy to full employment is to increase

Correct AnswerverifiedShow Answer

In the United States for the year 2010, the federal government had a ________ so the national debt was ________.

Correct AnswerverifiedShow Answer

When the economy is in a recession, ________ taxes decrease while ________ spending increases and, as a result of this automatic fiscal policy, aggregate demand ________.

Correct AnswerverifiedShow Answer

Correct Answer
verified

In the United States for the year 2010, the federal government had a so the national debt was .

Correct Answer
verified

When the economy is in a recession, taxes decrease while spending increases and, as a result of this automatic fiscal policy, aggregate demand .

Correct Answer
verified