Exam 27: Managing Aggregate Demand: Fiscal Policy

The government's fiscal policy is its plan for managing ______________ through its spending and taxing programs

Critics of supply-side economics argue that

According to supply-siders, tax cuts should increase aggregate supply.

During the 2008 presidential campaign, candidate Barack Obama argued in favor of repealing the majority of the Bush tax cuts in order to increase government revenue.

Which of the following is not a method to reduce the inflationary gap?

If the marginal propensity to consume ( MPC) is 0.5, the value of the multiplier is

A one-dollar tax reduction has the same effect as a one-dollar increase in government purchases.

At any given price level, equilibrium GDP on the expenditure side occurs when ____.

An automatic stabilizer is a feature of the economy that

In macroeconomic analysis, a transfer payment is considered a

Table 11-1 -Refer to Table 11-1.What is the level of saving in this model?

One of the objectives of supply-side policies is to

To eliminate an inflationary gap, the aggregate demand curve should

Congress is debating whether to raise taxes by $100 billion or decrease spending by $100 billion in order to eliminate a budget deficit.Which action will have the larger effect on equilibrium GDP?

If a "liberal" wanted to increase aggregate demand, which of the following would he or she tend to favor?

The president wishes not only to increase spending for education by $4 billion but also to maintain a balanced budget.Therefore, taxes will also be increased by $4 billion.What will happen to GDP?

Personal income taxes and corporate income taxes are examples of ____ taxes.

Figure 11-3 ​ -In Figure 11-3, which line represents the change in the consumption schedule caused by a cut in fixed taxes?

A budget deficit occurs when government expenditures are greater than tax revenues.

Supply-side tax cuts are more likely to have the intended beneficial effect on