FISCAL POLICY - Chapter 27 / 11 Fiscal Policy 1) AM27 \ C \...

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Chapter 27 / 11 Fiscal Policy 1) AM27 \ C \\ Fiscal Policy \ 1 \\ Changing government outlays or taxes to alter the level of economic activity is a form of: (a) environmental policy. (b) central planning. (c) fiscal policy. (d) federal planning. (e) monetary policy. 2) AM27 \ B \\ Fiscal Policy \ 2 \\ Standard macroeconomic concepts that bear on the effects of fiscal policies do not include: (a) structural budget surpluses or deficits. (b) Laffer curves. (c) fiscal drag. (d) tax revenue frontiers. (e) cyclical budget deficits. 3) AM27 \ D \\ Government Budget \ 2 \\ All else equal, increasing the net tax flow would increase: (a) disposable income. (b) Aggregate Demand. (c) equilibrium GDP. (d) a budget surplus. 4) AM27 \ A \\ Government Budgets \ 1 \\ The government operates a balanced budget when its: (a) outlays = tax revenues. (b) tax rates exceed tax revenues. (c) tax revenues equal transfer payments. (d) activities ensure full employment. (e) expenditures = tax revenues + bond financing. 5) AM27 \ C \\ Budget Deficits and Surpluses\ 1 \\ If government revenues exceed purchases and transfers there is a: (a) bias towards inflation. (b) macroeconomic equilibrium. (c) budget surplus. (d) Great Depression. Ralph Byrns Chapter 27 / 11 : Fiscal Policy Test Bank One 1
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6) AM27 \ A \\ Budget Deficits \ 2 \\ The federal government’s deficit is most likely to: (a) increase when the rate of unemployment increases. (b) decline when corporate profits decline. (c) become negative during a severe recession. (d) decline when foreigners buy U.S. Treasury bonds. 7) AM27 \ C\ Government Expenditures \ 1 \\ In the Keynesian expenditure model, government spending includes all: (a) outlays by federal, state, and local governments. (b) outlays by the federal government. (c) purchases of goods and services by federal, state, and local governments. (d) receipts by federal, state, and local governments. 8) AM27 \ A \\ Government Expenditures \ 2 \\ Government purchases are treated in the Keynesian model as: (a) injections into the spending stream. (b) outflows from the spending stream. (c) transfer payments from one group to another. (d) boondoggles and pork-barrel waste. 9) AM27 \ D \\ Discretionary Fiscal Policy \ 2 \\ Expansionary discretionary fiscal policies would not include increases in government: (a) defense contracts as part of a wartime military buildup. (b) spending to stimulate Aggregate Demand. (c) funding of college scholarships for impoverished students. (d) regulations to reduce unemployment compensation fraud. 10) AM27 \ C \\ Discretionary Fiscal Policy \ 2 \\ Discretionary fiscal policy entails: (a) automatic stabilizers that adjust to changing economic conditions. (b) autonomous spending or taxes that increase fiscal drag.
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This note was uploaded on 02/07/2011 for the course ECON 3461 taught by Professor Spencer during the Spring '10 term at Golden West College.

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FISCAL POLICY - Chapter 27 / 11 Fiscal Policy 1) AM27 \ C \...

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