# Which combination of fiscal policy actions would be

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Chapter 5 / Exercise 77
Intermediate Algebra
Tussy/Gustafson
Expert Verified
26. Which combination of fiscal policy actions would be most contractionary for an economy experiencing severe demand-pull inflation? A. Increase taxes and government spending B. Decrease taxes and government spending C. Increase taxes and decrease government spending D. Decrease taxes and increase government spending
27. If Congress passes legislation to cut taxes and increase government spending to counter the effects of a severe recession, this would be an example of a(n):
Use the figure below to answer the following question(s): 15-7
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Chapter 5 / Exercise 77
Intermediate Algebra
Tussy/Gustafson
Expert Verified
Chapter 15 - Fiscal Policy, Deficits, and Debt 28. Refer to the above graph. Assume that the economy is in a recession with a price level of P 2 and output level Q 4 . The government then adopts an expansionary fiscal policy to shift the aggregate demand curve. What will be the most likely new equilibrium price level and output? 4 1 2 3
29. Refer to the above graph. Assume that the economy initially has a price level of P 2 and output level Q 2 . The price level is flexible and the government decides to adopt a contractionary fiscal policy. What would most likely be the new equilibrium price level and output?
30. Discretionary fiscal policy refers to: A. any change in government spending or taxes that destabilizes the economy. B. the authority that the President has to change personal income tax rates. C. changes in taxes and government expenditures made by Congress to stabilize the economy. D. changes in taxes and transfers that occur as GDP changes.
31. Fiscal policy refers to the:
15-8
Chapter 15 - Fiscal Policy, Deficits, and Debt 32. Discretionary fiscal policy is so named because it:
Use the figure below to answer the following question(s):