assessment9 - Assessment 9 (Due: 5:10pm, 21 Nov (Fri))...

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Unformatted text preview: Assessment 9 (Due: 5:10pm, 21 Nov (Fri)) Submit via WebCT!!! 1) hich of the following is an example of discretionary fiscal policy? W A) n increase in unemployment insurance payments during a recession. A B) n increase in income tax receipts during an expansion because incomes are rising. A C) he tax cuts passed by Congress in 2001 to combat the recession. T D) decrease in income tax receipts during a recession because incomes are falling. A 2) Which of the following is a government expenditure and not a government purchase? A) he federal government buys a Humvee. T B) he federal government pays the salary of an FBI agent. T C) he federal government pays out an unemployment insurance claim. T D) he Federal government pays to support research on Aids. T 3) xpansionary fiscal policy ________ the price level and ________ equilibrium real GDP. E A) ecreases; increases d B) ncreases; decreases i C) ncreases; increases i D) ecreases; decreases d 4) he multiplier effect is the series of ________ increases in ________ expenditures that result T from an initial increase in ________ expenditures. A) nduced; investment; autonomous i B) nduced; consumption; autonomous i C) utonomous; consumption; induced a D) utonomous; investment; induced a 5) utting taxes by a specific fixed amount C A) ill lower income and lower spending. w B) ill raise income and lower spending. w C) ill lower income and raise spending. w D) ill raise income and raise spending. w 6) rowding out results in C A) igher interest rates, a lower exchange rate, and lower net exports. h B) igher interest rates, a higher exchange rate, and lower net exports. h C) ower interest rates, a lower exchange rate, and lower net exports. l D) ower interest rates, a higher exchange rate, and lower net exports. l 1 Assessment 9 (Due: 5:10pm, 21 Nov (Fri)) Submit via WebCT!!! 7) ncreases in government spending results in ________ in the short run, and permanent I increases in government spending result in ________ in the long run. A) artial crowding out; partial crowding out p B) artial crowding out; complete crowding out p C) omplete crowding out; complete crowding out c D) omplete crowding out; partial crowding out c 8) o counteract the effect of automatic stabilizers during a recession and keep the budget T balanced, the federal government must _________ government spending, or ________ taxes, and which will ________ aggregate demand. A) ncrease; decrease; increase i B) ncrease; increase; reduce i C) ecrease; decrease; increase d D) ecrease; increase; reduce d 9) ccumulating debt can be a problem for the federal government because A A) t is currently in danger of defaulting on on the debt. i B) large debt to GDP ratio causes crowding out. a C) urchases of roads and bridges add burden but no benefit to the economy. p D) he debt has to ultimately be paid off. t 10) ax reduction and simplification should ________ long run aggregate supply and ________ T aggregate demand. A) ncrease; increase i B) ncrease; decrease i C) ecrease; increase d D) ecrease; decrease d 2 ...
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