Exam 10: Fiscal Policy

Recall the Application about the success of the 2009 stimulus package to answer the following question(s). -According to the Application, economist John B. Taylor found that the aid to state and local governments which were a part of the 2009 stimulus package were used primarily to

The federal deficit ________ in 2006 and 2007, and ________ in 2008.

In order to ________, a government must decrease spending and increase taxation.

Recall the Application about how society will cope with increased demands for entitlement programs to answer the following question(s). This Application addresses the impact of increasing life expectancy and aging populations on the costs of government entitlement programs such as Social Security, Medicare and Medicaid, and examines several possible solutions to the potential problem. -According to this Application, how will an increase in government spending on entitlement programs affect the macroeconomy?

A federal budget ________ occurs when the government spends less than it collects in taxes.

The idea that a $1 increase in infrastructure spending will generate more than $1 in economic growth is a representation of

Briefly explain how a change in the personal income tax rate affects aggregate demand.

Contractionary policies are government policies that

Recall the Application about how society will cope with increased demands for entitlement programs to answer the following question(s). This Application addresses the impact of increasing life expectancy and aging populations on the costs of government entitlement programs such as Social Security, Medicare and Medicaid, and examines several possible solutions to the potential problem. -According to this Application, current spending on federal retirement and health programs accounts for 10 percent of GDP. Experts estimate that this spending component's share of GDP ________ by the year 2075.

What are the two components of federal spending?

Recall the Application about how society will cope with increased demands for entitlement programs to answer the following question(s). This Application addresses the impact of increasing life expectancy and aging populations on the costs of government entitlement programs such as Social Security, Medicare and Medicaid, and examines several possible solutions to the potential problem. -According to this Application, one solution proposed to deal with the rising expenses of government entitlement programs is to raise taxes. An increase in taxes to help cover the rising expenses of entitlement programs would

The Obama stimulus package was implemented to assist the economy in its recovery from recession. This package was designed to shift

One school of thought that emphasizes the role that taxes play in an economy's supply of output is known as

Explain how automatic stabilizers work.

The fact that it takes time for government to identify and recognize a problem is one reason for the occurrence of

In 2003, the Bush administration revised the tax bill to include provisions to

Due to the ________ effect, the final shift in aggregate demand is larger than the initial shift in aggregate demand.

What is the federal government's largest source of revenue?

Proponents of the estate and gift tax argue that the tax is necessary because

The time it takes to formulate a policy is known as