MACRO Chapter 8 TF

MACRO Chapter 8 TF - MACRO Chapter 8 1. Discretionary...

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Unformatted text preview: MACRO Chapter 8 1. Discretionary fiscal policy is independent of Congress and left to the discretion of state and local governments. T F 2. Expansionary fiscal policy during a recession or depression will create a budget deficit or add to an existing budget deficit. T F 3. A decrease in taxes is one of the options that can be used to pursue a contractionary fiscal policy. T F 4. A reduction in taxes and an increase in government spending would be characteristic of a contractionary fiscal policy. T F 5. Built-in stabilizers are not sufficiently strong to prevent recession or inflation, but they can reduce the severity of a recession or inflation. T F 6. When national income declines during a recession, tax revenues automatically decrease and increase the public debt. T F 7. The standardized budget indicates how much government must spend and tax if there is to be full employment in the economy. T F 8. The key to assessing discretionary fiscal policy is to observe the change in the standardized budget.The key to assessing discretionary fiscal policy is to observe the change in the standardized budget....
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