Question 1

If the (average)tax rate falls by 10% and as a result the tax base rises by 20%,then tax revenues will

Accepted Answer

A)  rise. 
B)  decline. 
C)  remain unchanged. 
D)  There is not enough information given to answer this question. 
A)  rise. 
B)  decline. 
C)  remain unchanged. 
D)  There is not enough information given to answer this question.

Question 2

Economist A believes that the expansionary fiscal policy --- in the form of increased government spending --- should be implemented to remove the economy from the recessionary gap it is currently in.This economist probably believes that

Accepted Answer

A)  crowding out will not present much of a problem. 
B)  crowding out will be a big problem. 
C)  crowding out is irrelevant to the degree of effectiveness of fiscal policy. 
D)  zero crowding out is unlikely. 
E)  c and d 
A)  crowding out will not present much of a problem. 
B)  crowding out will be a big problem. 
C)  crowding out is irrelevant to the degree of effectiveness of fiscal policy. 
D)  zero crowding out is unlikely. 
E)  c and d

Question 3

Economists who view the AS curve as vertical believe that government ________________ to raise Real GDP (in the short run)from the demand side of the economy.Economists who view the AS curve as upward-sloping believe that changes in Real GDP (in the short run)_________ result from changes on the demand side.

Accepted Answer

A)  can do many things;cannot 
B)  cannot do anything;may 
C)  can do many things;may 
D)  cannot do anything;cannot 
A)  can do many things;cannot 
B)  cannot do anything;may 
C)  can do many things;may 
D)  cannot do anything;cannot

Question 4

Economist B believes that the economy can get stuck in a recessionary gap.This economist most likely believes that

Accepted Answer

A)  wages and prices are flexible. 
B)  wages and prices are inflexible downward. 
C)  government may need to enact contractionary fiscal policy to move the economy out of a recessionary gap. 
D)  the economy is self-regulating. 
E)  none of the above 
A)  wages and prices are flexible. 
B)  wages and prices are inflexible downward. 
C)  government may need to enact contractionary fiscal policy to move the economy out of a recessionary gap. 
D)  the economy is self-regulating. 
E)  none of the above

Question 5

The government spending multiplier is the number that,when multiplied by the

Accepted Answer

A)  budget deficit,gives us the change in total spending. 
B)  budget deficit,gives us the change in the public debt. 
C)  change in taxes,gives us the change in total spending. 
D)  change in government spending,gives us the change in total spending. 
A)  budget deficit,gives us the change in total spending. 
B)  budget deficit,gives us the change in the public debt. 
C)  change in taxes,gives us the change in total spending. 
D)  change in government spending,gives us the change in total spending.

Question 6

Which of the following is true?

Accepted Answer

A)  All economists agree that the tax multiplier is greater than the government spending multiplier. 
B)  All economists agree that the tax multiplier is smaller than the government spending multiplier. 
C)  There is disagreement among economists regarding the size of the tax multiplier relative to the size of the government spending multiplier. 
D)  In the standard Keynesian textbook analysis,the tax multiplier is greater than the government spending multiplier. 
E)  c and d 
A)  All economists agree that the tax multiplier is greater than the government spending multiplier. 
B)  All economists agree that the tax multiplier is smaller than the government spending multiplier. 
C)  There is disagreement among economists regarding the size of the tax multiplier relative to the size of the government spending multiplier. 
D)  In the standard Keynesian textbook analysis,the tax multiplier is greater than the government spending multiplier. 
E)  c and d

Question 7

Tax revenues can rise as a result of a decrease in income tax rates,as long as the tax base increases sufficiently.

Accepted Answer

A) True 
 B)False

Question 8

The tax multiplier is the number that,when multiplied by the

Accepted Answer

A)  budget deficit,gives us the change in total spending. 
B)  budget deficit,gives us the change in the public debt. 
C)  change in taxes,gives us the change in total spending. 
D)  change in government spending,gives us the change in total spending. 
A)  budget deficit,gives us the change in total spending. 
B)  budget deficit,gives us the change in the public debt. 
C)  change in taxes,gives us the change in total spending. 
D)  change in government spending,gives us the change in total spending.

Question 9

If the AS curve is vertical,then it follows that

Accepted Answer

A)  Real GDP changes will always arise from the supply side of the economy. 
B)  Real GDP changes will always arise from the demand side of the economy. 
C)  Price level changes will always arise from the demand side of the economy. 
D)  Price level changes will always arise from the supply side of the economy. 
E)  a and c 
A)  Real GDP changes will always arise from the supply side of the economy. 
B)  Real GDP changes will always arise from the demand side of the economy. 
C)  Price level changes will always arise from the demand side of the economy. 
D)  Price level changes will always arise from the supply side of the economy. 
E)  a and c

If the (average)tax rate falls by 10% and as a result the tax base rises by 20%,then tax revenues will

Economist A believes that the expansionary fiscal policy --- in the form of increased government spending --- should be implemented to remove the economy from the recessionary gap it is currently in.This economist probably believes that

Economists who view the AS curve as vertical believe that government ________ to raise Real GDP (in the short run)from the demand side of the economy.Economists who view the AS curve as upward-sloping believe that changes in Real GDP (in the short run)_ result from changes on the demand side.

Economist B believes that the economy can get stuck in a recessionary gap.This economist most likely believes that

The government spending multiplier is the number that,when multiplied by the

Which of the following is true?

Tax revenues can rise as a result of a decrease in income tax rates,as long as the tax base increases sufficiently.

The tax multiplier is the number that,when multiplied by the

If the AS curve is vertical,then it follows that

What Economics Is About

Production Possibilities Frontier Framework

Supply and Demand: Theory

Prices: Free, controlled, and Relative

Supply,demand,and Price: Applications

Macroeconomic Measurements, Prices and Unemployment

Macroeconomic Measurements, Gdp and Real Gdp

Aggregate Demand and Aggregate Supply

Classical Macroeconomics and the Self-Regulating Economy

Keynesian Macroeconomics and Economic Instability: a Critique of the Self-Regulating Economy

Fiscal Policy and the Federal Budget

Money,banking,and the Financial System

The Federal Reserve System

Money and the Economy

Monetary Policy

Expectations Theory and the Economy

Economic Growth: Resources, technology, ideas, and Institutions

The Financial Crisis of 2007-2009

Public Choice and Special-Interest-Group Politics

Building Theories to Explain Everyday Life: From Observations to Questions to Theories to Predictions

International Trade

International Finance

Globalization and International Impacts on the Economy

The Economic Case for and Against Government: Five Topics Considered

Stocks, bonds, futures, and Options

Agriculture: Problems, policies, and Unintended Effects

Filters

Exam 19: Debates in Macroeconomics Over the Role and Effects of Government

If the (average)tax rate falls by 10% and as a result the tax base rises by 20%,then tax revenues will

Economist A believes that the expansionary fiscal policy --- in the form of increased government spending --- should be implemented to remove the economy from the recessionary gap it is currently in.This economist probably believes that

Economist B believes that the economy can get stuck in a recessionary gap.This economist most likely believes that

The government spending multiplier is the number that,when multiplied by the

Which of the following is true?

Tax revenues can rise as a result of a decrease in income tax rates,as long as the tax base increases sufficiently.

The tax multiplier is the number that,when multiplied by the

If the AS curve is vertical,then it follows that

What Economics Is About

Production Possibilities Frontier Framework

Supply and Demand: Theory

Prices: Free, controlled, and Relative

Supply,demand,and Price: Applications

Macroeconomic Measurements, Prices and Unemployment

Macroeconomic Measurements, Gdp and Real Gdp

Aggregate Demand and Aggregate Supply

Classical Macroeconomics and the Self-Regulating Economy

Keynesian Macroeconomics and Economic Instability: a Critique of the Self-Regulating Economy

Fiscal Policy and the Federal Budget

Money,banking,and the Financial System

The Federal Reserve System

Money and the Economy

Monetary Policy

Expectations Theory and the Economy

Economic Growth: Resources, technology, ideas, and Institutions

The Financial Crisis of 2007-2009

Public Choice and Special-Interest-Group Politics

Building Theories to Explain Everyday Life: From Observations to Questions to Theories to Predictions

International Trade

International Finance

Globalization and International Impacts on the Economy

The Economic Case for and Against Government: Five Topics Considered

Stocks, bonds, futures, and Options

Agriculture: Problems, policies, and Unintended Effects

Filters