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Devry Eco312 week 5 assessment




Question;Question 1.1.(TCO 6) Discretionary;fiscal policy refers to (Points;1);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 2.2.(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?(Points: 1);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 3.3.(TCO 6) The financing of a;government deficit increases interest rates and, as a result, reduces;investment spending. This statement describes (Points: 1);the supply-side effects of;fiscal policy.built-in stability.the crowding-out effect.the net export effect.;Question 4.4.(TCO 5) The determinants of;aggregate supply(Points;1);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 5.5.(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 (Points: 1);affect neither aggregate;supply nor aggregate demand.increase aggregate demand.reduce aggregate demand.reduce aggregate supply.;Question 6.6.(TCO 6) The consumption;schedule directly relates (Points;1);consumption to the level of;disposable income.saving to the level of;disposable income.disposable income to domestic;income.consumption to saving.;Question 7.7.(TCO 6) Dissaving means (Points: 1);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 8.8.(TCO 5) Refer to the graph.;Which of the following changes will shift AD1 to AD2?;Graph Description;(Points: 1);A cut in personal and;business taxesAn increase in the value of;the dollar relative to other currenciesA shrinkage in the value of;stocks and other financial assetsAn increase in real interest;rates;Question 9.9.(TCO 6) The multiplier is (Points: 1);1/MPC.1/(1 + MPC).1/MPS.1/(1 - MPS).;Question 10.10.(TCO 5) The Federal budget;deficit is found by (Points: 1);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 11.11.(TCO 5) What effect would;each of the following have on aggregate demand or aggregate supply?;Explain.;a. A;widespread fear by consumers of an impending economic depression;b.;Labor Productivity (Output per man hour) goes up;(Points: 5);Question 12.12.(TCO 6) Why do some economists believe that tax;cuts are critical to help revive an economy experiencing a recession? (Points: 5)


Paper#55915 | Written in 18-Jul-2015

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