Exam 11: Managing Aggregate Demand Fiscal Policy

A conservative who was opposed to an increase in the size of the government sector but believed in the Keynesian approach to aggregate demand management would most likely favor which of the following expansionary policies?

A major complication with fiscal policy to control aggregate demand is the

With regard to GDP,residential property taxes are an example of ____ taxes.

If the demand-side effects of supply-side tax cuts are greater than the supply-side effects,then we can expect the result to be a(n)

Compared to an economy's self-correcting mechanism,active contractionary fiscal policy will

Reducing transfer payments is an appropriate way to counteract a recessionary gap.

Why did President George W.Bush feel the need for a stimulus package for the U.S.economy after September 11,2001? As a conservative,what type of fiscal stimulus would be most appealing to President Bush?

The Japanese economy is stuck in a recessionary gap.The proper fiscal policy could include a(n)

An increase in income taxes was part of President George W.Bush's plan in 2001 and 2008 to increase aggregate demand.

Supply-side tax cuts tend to benefit the rich because tax cuts

In 2000,many economists believed that the most serious macroeconomic problem confronting the U.S.economy was an inflationary gap.Which policies would be effective in dealing with this problem?

Figure 11-2 -Which graph in Figure 11-2 best reflects a Keynesian view of the impact of a $500-per-person tax cut?

If all variable taxes in the United States were removed and only fixed taxes remained,what would be the effect on the expenditures schedule?

The oversimplified formula for the multiplier yields a number that is too large due to the exclusion of

Most of the taxes collected by governments tend to

A tax reduction shifts the consumption schedule downward.

Transfer payments are income that is

When you compare the effects of government spending on aggregate demand with the effects of taxes on aggregate demand,the effects of government spending are

Figure 11-3 -In Figure 11-3,which line represents the change in the consumption schedule caused by an increase in the residential property tax?

Which of the following conclusions about supply-side tax initiatives is accepted by most economists?