Exam 11: Managing Aggregate Demand: Fiscal Policy

In 2009,the U.S.economy was experiencing a(n)

During the 2009-2010 stimulus debate,Republicans argued that increases in government spending would be more effective than decreases in taxes.

When policy makers choose between tax policy and spending policy to affect the level of aggregate demand,they tend to choose on the basis of

Government purchases have the same multiplier effect as business investment spending.

An increase in taxes will cause the consumption schedule to

Taxes are the difference between

An active stabilization policy designed to limit the size of government would

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

Government transfer payments

A proponent of supply-side economics would advocate

When total expenditures exceed the economy's potential GDP,the proper fiscal policy is to

During the 2009-2010 debate on the stimulus package,democrats argued primarily for increased government spending.What effect would this have on the value of the multiplier?

If President Obama wanted to decrease aggregate demand,which of the following would he tend to favor?

Why did President Obama want to repeal the Bush era tax cuts on upper income taxpayers? How would the repeal of these tax cuts impact aggregate demand and to what degree? How did the economic conditions in 2010 make such a repeal less likely to take place?

When the economy has an income tax that is variable,the multiplier is

An increase in income taxes was part of President George W.Bush's plan in 2001 and 2008 to increase aggregate demand.

In 2006 and 2007 the U.S.faced an inflationary gap which would suggest the use of restrictive fiscal policy.

When government spending is added to the basic macroeconomic model,the multiplier for G would

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

Reducing transfer payments is an appropriate way to counteract a recessionary gap.