Exam 11: Fiscal Policy: The Keynesian View and the Historical Development of Macroeconomics

Automatic stabilizers will shift the government budget toward

Use the figure below to answer the following question(s). Figure 11-1 Refer to Figure 11-1.  Consider the short-run aggregate supply curve SRAS. What is the segment between a and b called?

The government is pursuing an expansionary fiscal policy if it

If the government owes $15.0 trillion and then borrows $900 billion more this year, this leads to

Unemployment compensation payments

When the unemployment rate is low, the impact of additional spending on real output will

Which of the following provides the best information about the direction of the government's fiscal policy?

When the spending of consumers, businesses, government, and foreigners (net exports) is less than the current level of output, Keynesian analysis indicates that

When an economy expands into an economic boom, automatic stabilizers will tend to

The 1930s were a period of

The multiplier effect refers to the fact that a change in spending (aggregate demand) will

Is there any way to conduct fiscal policy and avoid the lags involved with discretionary policy?

Within the Keynesian model, when total spending is less than the full-employment level of output, firms will

The primary tool of fiscal policy is

What three types of timing problems might policy makers experience when conducting discretionary fiscal policy?

Within the framework of the Keynesian model,

Keynesian analysis implies that potential output and price stability can be achieved if

The multiplier principle is important because it

Use the figure below to answer the following question(s). Figure 11-2 Refer to Figure 11-2. Which of the following will a Keynesian most likely favor if the economy is operating at point a?

Fiscal policy designed to increase aggregate demand during economic downturns and decrease aggregate demand during economic booms is called