Exam 27: Managing Aggregate Demand: Fiscal Policy

Which of the following individuals would most likely favor an increase in government spending, as opposed to a tax cut, as the basis for expansionary fiscal policy?

Assume that the federal government wishes to counteract inflation with a policy that has the smallest impact on the federal budget. Which of the following would you recommend?

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

Inflationary gaps can be cured by either cutting government expenditures or raising taxes.

What are the policies usually advocated by supply-side economists? How do they justify these proposals?

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?

When we add a personal income tax to the macroeconomic model, the

Expansionary fiscal policy can mitigate recessions, but it also

A reduction in the capital gains tax, often advocated by proponents of supply-side economics, is supposed to stimulate increased

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

The difference between a fixed tax and a variable tax is that

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

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.

The aim of the supply-side tax cuts is to push the economy's aggregate supply curve outward to the right.

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?

The main idea behind supply-side tax cuts is that

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?

Expansionary fiscal policy can cause a rise in real GDP in combination with

A change in a fixed tax will cause the consumption schedule to

Supply-side tax cuts are likely to widen income inequalities.