RHW14ANS

RHW14ANS - Rhw14 2 3 5 7 8 13 24 26 29 33 35 37 38 41 44 46...

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Rhw14 2 3 5 7 8 13 24 26 29 33 35 37 38 41 44 46 47 Question2 - Single Correct 1.0 Point The national debt A is the sum of all past federal deficits plus any surpluses. B grows when the government runs a deficit. C grows when government spending increases. D is a major problem facing the U.S. government. FACT. DEBT IS THE SUM OF PAST DEFICITS. IF DEFICIT IS 0, DEBT STAYS WHERE IT IS, IF RUNNING A DEFICIT, DEBT INCREASES, SURPLUS, DEBT FALLS Question3 - Single Correct 1.0 Point The crowding-out effect refers to which of the following? A reductions in aggregate demand that occur as the government enacts a fiscal policy that is intended to eliminate an inflationary gap B price increases that result in less purchasing power for consumers C increases in consumption spending that leave fewer resources available for the economy to use to create capital D reductions in private investment spending that offset increases in government purchase of investment goods because of the way the government purchases are financed FACT. IF GOV’T SPENDS MORE, IT BORROWS MORE WHICH DRIVES UP INTEREST RATES (COST OF BORROWING) WHICH LOWERS INVESTMENT Question5 - Single Correct 1.0 Point Which of the following statements is true regarding the government budget? A The government's budget has been in deficit since the 1960s. B The government's budget has been in deficit since World War II except for a brief period between 1998 and 2001. C The government's budget was generally in surplus until the 1980s, then mostly in deficit since except for a brief period between 1998 and 2001. D The government's budget was generally in surplus in the 1960s, then mostly in deficit since except for a brief period between 1998 and 2001. FACT
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Question7 - Single Correct 1.0 Point In the United States, most of the government's taxing and spending is A to stabilize the economy and move it to its potential output. B to bring about greater income equality. C to keep inflation at a moderate level. D for purposes other than economic stabilization. FACT – FOR DEFENSE, MEDICARE, MEDICAID, ETC. ONLY SINCE 2007 HAVE WE SEEN LARGE INCREASES FOR STABILIZATION Question8 - Single Correct 1.0 Point Supply-side economics is the school of thought that advocates the use of A monetary policy to stimulate short-run aggregate supply. B fiscal policy to stimulate short-run aggregate demand. C monetary policy to stimulate short-run aggregate demand. D tax cuts to stimulate short-run aggregate supply. EXACTLY. BASICALLY, CUT PAYROLL TAXES, PEOPLE WORK MORE PRODUCING MORE. CUT BUSINESS TAXES, THEY EXPAND CAPACITY AND PRODUCE MORE. EVIDENCE SUGGESTS THAT THIS MAY WORK IN LR (FOR GROWTH), DOESN’T IN SHORT-RUN Question13 - Single Correct 1.0 Point During a contraction, ______ income tax revenues tend to automatically increase a ______or reduce a _________. A higher; budget deficit; budget surplus
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RHW14ANS - Rhw14 2 3 5 7 8 13 24 26 29 33 35 37 38 41 44 46...

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