Final Practice Exam (multiple choice questions)

Final Practice Exam (multiple choice questions) -...

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final(practice) Multiple Choice Identify the letter of the choice that best completes the statement or answers the question. ____ 1. During the 2004 election, the debate over fiscal policy focused on a. tax cuts for households and businesses in different income brackets. b. tax cuts for households versus government spending for homeland security. c. raising taxes on low and middle-income households versus raising taxes on high-income households. d. how to balance the government budget through either raising taxes or cutting government spending. ____ 2. Taxes are the difference between a. GDP and net exports. b. GDP and consumer spending. c. Consumer spending and saving. d. GDP and disposable income. ____ 3. Personal income taxes and corporate income taxes are examples of ____ taxes. ____ 4. During the period from 2001 to 2006, there will be several major cuts in personal income tax rates. What effect will these have on the value of the multiplier? ____ 5. How does an increase in government transfer payments affect aggregate demand? ____ 6. You are a member of the Japanese Diet in 2001 when the economy is in a recessionary gap. If your goal is to achieve full employment, you should vote for 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. Figure 11-1 1
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____ 7. In Figure 11-1, to achieve equilibrium at potential GDP the government could ____
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