macro 9&10 - KEYNES- thought govt spending...

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KEYNES- thought govt spending (exapansionary fiscal policy) was necessary to bring global economy out of a recession FISCAL POLICY- GDP= C+I+ LEVEL OF GOVT SPENDING W/IN THE ECONOMY. If g increases, GDP can increase. If g decreases, GDP can decrease EXPENDITURES METHOD: GDP= C+I+G+Xn EXPANSIONARY FISCAL POLICY- govt increases spending or decreases texes CONTRACTIONARY FISCAL POLICY- Govt decreases spending or increases taxes In times of INFLATION, the govt should engage contractionary fiscal policy In times of RECESSION, govt should engage EXPANSIONARY fical policy ser Anita Stone Submitted 7/11/10 10:30 PM Name Chapter 11 Quiz Status Completed Score 11 out of 15 points Time Elapsed 0 hours, 21 minutes, and 13 seconds out of 0 hours and 30 minutes allowed. Instructions Question 1 text Question 1 1 out of 1 points Correct Which of the following would decrease the size of a federal budget deficit? Question 1 answers Selected Answer: Correct Growth in real GDP Correct Answer: Correct Growth in real GDP Question 2 text Question 2 1 out of 1 points Correct The government is pursuing an expansionary fiscal
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policy if it Question 2 answers Selected Answer: Correct increases government spending and/or reduces taxes. Correct Answer: Correct increases government spending and/or reduces taxes. Question 3 text Question 3 1 out of 1 points Correct If the government owes $4,500 billion and then borrows $300 billion more this year, Question 3 answers Selected Answer: Correct the debt is $4,800 billion and the deficit is $300 billion. Correct Answer: Correct the debt is $4,800 billion and the deficit is $300 billion. Question 4 text Question 4 1 out of 1 points Correct If the economy is in a recession, and the government raises taxes in an effort to balance the budget, the Keynesian model indicates the likely effect will be to Question 4 answers Selected Answer: Correct worsen and prolong the recession. Correct Answer: Correct worsen and prolong the recession. Question 5 text Question 5 1 out of 1 points Correct When the federal government is running a budget surplus, Question 5 answers Selected Answer: Correct government revenues exceed government expenditures. Correct Answer: Correct government revenues exceed government expenditures. Question 6 text Question 6 0 out of 1 points Incorrect Kim Harper's annual income increased from $20,000 to $25,000. If Kim faces a 40 percent effective marginal tax rate, the $5,000 increase in income will expand her disposable income by
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Question 6 answers Selected Answer: Incorrect $3,600. Correct Answer:
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This note was uploaded on 01/26/2011 for the course ECON 101/102 taught by Professor Ivytechonline during the Spring '10 term at Indiana.

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macro 9&10 - KEYNES- thought govt spending...

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