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Question;Question 1. Question;(TCO 6) Discretionary fiscal policy refers to;any change in government spending or taxes;that destabilizes the economy.;the authority that the President has to change;personal income tax rates.;intentional changes in taxes and government;expenditures made by Congress to stabilize the economy.;the changes in taxes and transfers that occur;as GDP changes.;Question 2. Question;(TCO 6) Suppose that the economy is in the midst of a;recession. Which of the following policies would most likely end the recession;and stimulate output growth?;A Congressional proposal to incur a Federal;surplus to be used for the retirement of public debt.;Reductions in agricultural subsidies and;veterans' benefits.;Postponement of a highway construction;program.;Reductions in Federal tax rates on personal;and corporate income.;Question 3. Question;(TCO 6) The financing of a government deficit increases;interest rates and, as a result, reduces investment spending. This statement;describes;the supply-side effects of fiscal policy.;built-in stability.;the crowding-out effect.;the net export effect.;Question 4. Question;(TCO 5) The determinants of aggregate supply;are consumption, investment, government, and;net export spending.;explain why real domestic output and the price;level are directly related.;explain the three distinct ranges of the;aggregate supply curve.;include resource prices and resource;productivity.;Question 5. Question;(TCO 6) In an effort to avoid recession, the government;implements a tax rebate program, effectively cutting taxes for households. We;would expect this to;affect neither aggregate supply nor aggregate;demand.;increase aggregate demand.;reduce aggregate demand.;reduce aggregate supply.;Question 6. Question;(TCO 6) The consumption schedule directly relates;consumption to the level of disposable income.;saving to the level of disposable income.;disposable income to domestic income.;consumption to saving.;Question 7. Question;(TCO 6) Dissaving means;the same thing as disinvesting.;that households are spending more than their;current incomes.;that saving and investment are equal.;that disposable income is less than zero.;Question 8. Question;(TCO 5) Refer to the graph. Which of the following changes;will shift AD1 to AD2?;Graph Description;A cut in personal and business taxes;An increase in the value of the dollar;relative to other currencies;A shrinkage in the value of stocks and other;financial assets;An increase in real interest rates;Question 9. Question;(TCO 6) The multiplier is;1/MPC.;1/(1 + MPC).;1/MPS.;1/(1 - MPS).;Question 10. Question;(TCO 5) The Federal budget deficit is found by;subtracting government tax revenues plus;government borrowing from government spending in a particular year.;subtracting government tax revenues from;government spending in a particular year.;cumulating the differences between government;spending and tax revenues over all years since the nation's founding.;subtracting government revenues from the;noninvestment-type government spending in a particular year.;Question 11. Question;(TCO 5) What effect would each of the following have on;aggregate demand or aggregate supply? Explain.;Question 12. Question;(TCO 6) Why do some economists believe that tax cuts are;critical to help revive an economy experiencing a recession?


Paper#55508 | Written in 18-Jul-2015

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