Pre-Test Chap 30 e18 - Pre-Test Chap 30 e18 Student: _ 1....

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Pre-Test Chap 30 e18Student: ___________________________________________________________________________1. An economy is experiencing a high rate of inflation. The government wants to reduce consumption by $36 billion to reduceinflationary pressure. The MPC is .75. By how much should the government raise taxes to achieve its objective?A. $6 billionB. $9 billionC. $12 billionD. $16 billion
2. In the last quarter of 2007:
3. If a government wants to pursue an expansionary fiscal policy, then a tax cut of a certain size will be more expansionary the:
4. To understand the quantitative significance of the public debt relative to the economy, it should be:
5. If the Congress passes legislation to cut taxes to counter the effects of a severe recession, then this would be an example of a:A. Political business cycleB. Contractionary fiscal policyC. Expansionary fiscal policyD. Nondiscretionary fiscal policy
6. If the standardized budget shows a deficit of about $100 billion and the actual budget shows a deficit of about $150 billion over aseveral-year period, it can be concluded that there is a:
7. The United States is experiencing recession, so Congress adopts an expansionary fiscal policy. State governments face a budgetshortfall and raise taxes to balance their budgets. The actions of state governments would:
The following is budget information for a hypothetical economy. All data are in billions of dollars.

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