Exam 11: Fiscal Policy

If the Naval Research Laboratory fired a chemist and the Environmental Protection Agency hired her at the same salary,the net effect of these events would cause _____ in aggregate demand.

Which of the following is not a tool of fiscal policy?

Political business cycles result:

Which of the following groups did Clinton target after his stimulus package failed in 1993?

Suppose the federal government increases the unemployment benefits financed by higher income taxes.In this case,which of the following is likely to occur?

A federal budget deficit occurs when:

The natural rate of unemployment is:

According to Keynesian theory,the natural forces in the economy may not quickly move the economy toward potential real GDP.

If fiscal policy makers increase aggregate demand in an attempt to decrease the unemployment rate below the natural rate of unemployment,then:

Keynes believed that the economy does not automatically move toward an equilibrium at full employment.

Which of the following measures did President Bush adopt in 2001 to get the economy moving again?

_____ when net taxes are reduced.

People will be likely to spend a higher percentage of any additional income when _____.

The American Recovery and Reinvestment Act passed in February 2009 was the largest measure of discretionary fiscal policy in US history.

_____ is contrary to a laissez-faire economic system.

The steeper the short-run aggregate supply curve,_____.

A $100 billion increase in government purchases will have the same effect on real GDP as a $100billion decrease in net taxes.

Because the income tax structure is progressive,the amount of taxes paid is a _____.

Large federal budget deficits:

Figure 11.2 shows the relationship between the price level and real GDP.Suppose the economy is currently at e'.A leftward shift of the short-run aggregate supply curve would return the economy to potential output at: