Question 1

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

Accepted Answer

A)  an increase in the price level. 
B)  a decrease in the price level. 
C)  no change in the price level. 
D)  a decrease in the price level if the aggregate supply curve is upward sloping. 
A)  an increase in the price level. 
B)  a decrease in the price level. 
C)  no change in the price level. 
D)  a decrease in the price level if the aggregate supply curve is upward sloping.

Question 2

Ronald Reagan's presidency could be characterized as a period of

Accepted Answer

A)  passive monetary policy. 
B)  passive fiscal policy. 
C)  active fiscal policy. 
D)  active regulatory policy. 
A)  passive monetary policy. 
B)  passive fiscal policy. 
C)  active fiscal policy. 
D)  active regulatory policy.

Question 3

Define the following terms and explain their significance to the study of macroeconomics:
a.fiscal policy
b.transfer payments
c.effect of income taxes on the multiplier
d.supply-side tax cuts

Accepted Answer

a.Fiscal policy is the federal governmen

Question 4

Fiscal policy consists of

Accepted Answer

A)  taxes and interest rates. 
B)  government purchases and defense spending. 
C)  the money supply and taxes. 
D)  taxes and government spending. 
A)  taxes and interest rates. 
B)  government purchases and defense spending. 
C)  the money supply and taxes. 
D)  taxes and government spending.

Question 5

The Japanese economy is stuck in a recessionary gap.The proper fiscal policy could include a(n)

Accepted Answer

A)  decrease in taxes. 
B)  increase in government purchases. 
C)  increase in transfer payments. 
D)  All of the above are correct. 
A)  decrease in taxes. 
B)  increase in government purchases. 
C)  increase in transfer payments. 
D)  All of the above are correct.

Question 6

In the middle of a severe recession,Congress passes an increase in the level of unemployment benefits.This would be considered by economists as a

Accepted Answer

A)  positive tax. 
B)  negative tax. 
C)  form of government purchases. 
D)  variable tax. 
A)  positive tax. 
B)  negative tax. 
C)  form of government purchases. 
D)  variable tax.

Question 7

Most economists seem to agree that cutting taxes

Accepted Answer

A)  on saving has more impact than cutting taxes to increase investment. 
B)  to stimulate investment is more effective than cutting taxes to stimulate work. 
C)  to increase work is more effective than cutting taxes to stimulate investment. 
D)  to increase work incentives is more effective than cutting taxes on saving. 
A)  on saving has more impact than cutting taxes to increase investment. 
B)  to stimulate investment is more effective than cutting taxes to stimulate work. 
C)  to increase work is more effective than cutting taxes to stimulate investment. 
D)  to increase work incentives is more effective than cutting taxes on saving.

Question 8

You are a member of Congress in 2007-2009 when the economy is in a recessionary gap.If your goal is to achieve full employment,you should vote for

Accepted Answer

A)  decreased government purchases, increased taxes, and a cut in transfer payments. 
B)  a balanced federal budget. 
C)  increased government purchases, decreased taxes, and an increase in transfer payments. 
D)  increased government purchases and transfer payments, and an equal increase in taxes. 
A)  decreased government purchases, increased taxes, and a cut in transfer payments. 
B)  a balanced federal budget. 
C)  increased government purchases, decreased taxes, and an increase in transfer payments. 
D)  increased government purchases and transfer payments, and an equal increase in taxes.

Question 9

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?

Accepted Answer

A)  Increase transfer payments. 
B)  Increase government purchases. 
C)  Decrease government purchases. 
D)  Decrease transfer payments. 
E)  Increase personal income taxes. 
A)  Increase transfer payments. 
B)  Increase government purchases. 
C)  Decrease government purchases. 
D)  Decrease transfer payments. 
E)  Increase personal income taxes.

Question 10

As a result of the recent financial crisis,some analysts believed that the MPC in the U.S.declined.If this is t,the value of the multiplier is now

Accepted Answer

A)  smaller. 
B)  larger. 
C)  the same. 
D)  magnified to a larger amount. 
A)  smaller. 
B)  larger. 
C)  the same. 
D)  magnified to a larger amount.

Question 11

A proponent of supply-side economics would advocate

Accepted Answer

A)  increasing income taxes on saving. 
B)  reducing corporate income tax. 
C)  increasing capital gains tax. 
D)  increasing personal income tax. 
A)  increasing income taxes on saving. 
B)  reducing corporate income tax. 
C)  increasing capital gains tax. 
D)  increasing personal income tax.

Question 12

Discuss some of the general conclusions arrived at about supply-side tax initiatives.

Accepted Answer

1.The likely effectiveness of supply-sid

Question 13

When taxes are decreased,disposable income increases even though GDP is unchanged.

Accepted Answer

A) True 
 B)False

Question 14

How will a cut in a fixed tax affect the consumption schedule?

Accepted Answer

A)  It will shift downward. 
B)  It will shift upward. 
C)  It will become flatter. 
D)  It will become steeper. 
A)  It will shift downward. 
B)  It will shift upward. 
C)  It will become flatter. 
D)  It will become steeper.

Question 15

How do transfer payments function as negative taxes?

Accepted Answer

Transfer payments intervene between gros

Question 16

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?

Accepted Answer

The decline in real GDP and the existenc

Question 17

President George W.Bush,who favored a smaller government sector,

Accepted Answer

A)  believed we should increase G to eliminate a recessionary gap. 
B)  believed we should raise taxes to eliminate an inflationary gap. 
C)  favored an active fiscal policy just as well as those who favor a larger government sector. 
D)  argued against the use of an active fiscal policy. 
A)  believed we should increase G to eliminate a recessionary gap. 
B)  believed we should raise taxes to eliminate an inflationary gap. 
C)  favored an active fiscal policy just as well as those who favor a larger government sector. 
D)  argued against the use of an active fiscal policy.

Question 18

Capital gains tax cuts inevitably benefit

Accepted Answer

A)  low-income workers. 
B)  retired persons. 
C)  workers in large cities. 
D)  high-income stock owners. 
A)  low-income workers. 
B)  retired persons. 
C)  workers in large cities. 
D)  high-income stock owners.

Question 19

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

Accepted Answer

A)  An increase in government spending, because it has a larger multiplier than tax changes. 
B)  A decrease in transfer payments, because it keeps the public sector small. 
C)  An increase in transfer payments, because it has a larger multiplier than tax changes. 
D)  A decrease in taxes, because it makes the public sector smaller. 
A)  An increase in government spending, because it has a larger multiplier than tax changes. 
B)  A decrease in transfer payments, because it keeps the public sector small. 
C)  An increase in transfer payments, because it has a larger multiplier than tax changes. 
D)  A decrease in taxes, because it makes the public sector smaller.

Question 20

If the MPC in the U.S.was low,it would increase the value of the multiplier.

Accepted Answer

A) True 
 B)False

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

Ronald Reagan's presidency could be characterized as a period of

Define the following terms and explain their significance to the study of macroeconomics: a.fiscal policy b.transfer payments c.effect of income taxes on the multiplier d.supply-side tax cuts

Fiscal policy consists of

The Japanese economy is stuck in a recessionary gap.The proper fiscal policy could include a(n)

In the middle of a severe recession,Congress passes an increase in the level of unemployment benefits.This would be considered by economists as a

Most economists seem to agree that cutting taxes

You are a member of Congress in 2007-2009 when the economy is in a recessionary gap.If your goal is to achieve full employment,you should vote for

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?

As a result of the recent financial crisis,some analysts believed that the MPC in the U.S.declined.If this is t,the value of the multiplier is now

A proponent of supply-side economics would advocate

Discuss some of the general conclusions arrived at about supply-side tax initiatives.

When taxes are decreased,disposable income increases even though GDP is unchanged.

How will a cut in a fixed tax affect the consumption schedule?

How do transfer payments function as negative taxes?

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?

President George W.Bush,who favored a smaller government sector,

Capital gains tax cuts inevitably benefit

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

If the MPC in the U.S.was low,it would increase the value of the multiplier.

What Is Economics?

The Economy: Myth and Reality

The Fundamental Economic Problem: Scarcity and Choice

Supply and Demand: An Initial Look

An Introduction to Macroeconomics

The Goals of Macroeconomic Policy

Economic Growth: Theory and Policy

Aggregate Demand and the Powerful Consumer

Demand-Side Equilibrium: Unemployment or Inflation?

Bringing in the Supply Side: Unemployment and Inflation?

Money and the Banking System

Monetary Policy: Conventional and Unconventional

The Financial Crisis and the Great Recession

The Debate over Monetary and Fiscal Policy

Budget Deficits in the Short and Long Run

The Trade Off between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System: Order or Disorder?

Exchange Rates and the Macroeconomy

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Exam 11: Managing Aggregate Demand: Fiscal Policy

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

Ronald Reagan's presidency could be characterized as a period of

Define the following terms and explain their significance to the study of macroeconomics: a.fiscal policy b.transfer payments c.effect of income taxes on the multiplier d.supply-side tax cuts

Fiscal policy consists of

The Japanese economy is stuck in a recessionary gap.The proper fiscal policy could include a(n)

In the middle of a severe recession,Congress passes an increase in the level of unemployment benefits.This would be considered by economists as a

Most economists seem to agree that cutting taxes

You are a member of Congress in 2007-2009 when the economy is in a recessionary gap.If your goal is to achieve full employment,you should vote for

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?

As a result of the recent financial crisis,some analysts believed that the MPC in the U.S.declined.If this is t,the value of the multiplier is now

A proponent of supply-side economics would advocate

Discuss some of the general conclusions arrived at about supply-side tax initiatives.

When taxes are decreased,disposable income increases even though GDP is unchanged.

How will a cut in a fixed tax affect the consumption schedule?

How do transfer payments function as negative taxes?

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?

President George W.Bush,who favored a smaller government sector,

Capital gains tax cuts inevitably benefit

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

If the MPC in the U.S.was low,it would increase the value of the multiplier.

What Is Economics?

The Economy: Myth and Reality

The Fundamental Economic Problem: Scarcity and Choice

Supply and Demand: An Initial Look

An Introduction to Macroeconomics

The Goals of Macroeconomic Policy

Economic Growth: Theory and Policy

Aggregate Demand and the Powerful Consumer

Demand-Side Equilibrium: Unemployment or Inflation?

Bringing in the Supply Side: Unemployment and Inflation?

Money and the Banking System

Monetary Policy: Conventional and Unconventional

The Financial Crisis and the Great Recession

The Debate over Monetary and Fiscal Policy

Budget Deficits in the Short and Long Run

The Trade Off between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System: Order or Disorder?

Exchange Rates and the Macroeconomy

Filters