16 - Fiscal policy consists of: ( )A) changes in tax rates...

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Fiscal policy consists of: ( ) A) changes in tax rates and reserve ratios. ( ) B) changes in tax rates and government spending. (X) C) changes in government spending and the money supply. ( ) D) immigration policy and targeted tax incentives. Feedback: Fiscal policy is the use of government taxes and spending to alter macroeconomic outcomes. Automatic subsidizers tend to: (X) A) cause spending to increase during recessions. ( ) B) cause tax revenues to rise during periods of economic booms. ( ) C) cause budget deficits to increase during recessions. ( ) D) All of the above are true. Feedback: All of these are true of automatic stabilizers. The Fed ______ short-term interest rates several times from 2001 until 2003. ( ) A) increased ( ) B) decreased ( ) C) left unchanged (X) D) None of the above is true. Feedback: The Fed repeatedly decreased interest rates during this time period. Discretionary policy refers to: (X) A) deliberate changes in fiscal or monetary policy. ( ) B) codes of conduct describing rules of etiquette for senior governmental workers.
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C) the implementation of policy that is not favored by a majority of the voters and, as a result, has to be implemented with great discretion. ( ) D) policy changes that automatically result from changes in the economy. Feedback: Discretionary fiscal policy means deliberate changes in tax or spending legislation. Supply-side policies include: ( ) A) efforts to reduce taxes. ( ) B) efforts to increase deregulation. (X) C) efforts to shift the aggregate- supply curve to the right. ( ) D) All of the above are true. Feedback: All of these are supply-side policies. The Jobs and Growth Tax Relief Act of 2003 ______ taxes on dividends and capital gains. ( ) A) increased ( ) B) decreased (X) C) didn't change ( ) D) None of the above is true. Feedback: The Jobs and Growth Tax Relief Act of 2003 reduced dividend and capital gains taxes. Structural unemployment consists: (X) A) of unemployment in the buildings trade, especially the construction of large structures, due to rising interest rates. ( ) B)
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This note was uploaded on 03/07/2012 for the course BUSN 1000 taught by Professor Web during the Spring '12 term at Webster.

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16 - Fiscal policy consists of: ( )A) changes in tax rates...

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