Which of the following is considered contractionary fiscal policy A The New

Which of the following is considered contractionary

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62) Which of the following is considered contractionary fiscal policy?A) The New Jersey legislature cuts highway spending to balance its budget.B) Congress increases defense spending.C) Congress increases the income tax rate.D) Legislation removes a college tuition deduction from federal income taxes.Answer: C62)Page Ref: 945-946/563-564Learning Outcome: Macro-9: Discuss fundamental approaches to fiscal policy.63) Expansionary fiscal policy to prevent real GDP from falling below potential real GDP wouldcause the inflation rate to be ________ and real GDP to be ________.Page Ref: 945-946/563-564Learning Outcome: Macro-13: Discuss the key measures, theories, and effects of inflation and deflation.64) Expansionary fiscal policy will64)Page Ref: 945-946/563-564Learning Outcome: Macro-9: Discuss fundamental approaches to fiscal policy.65) Which of the following is an appropriate discretionary fiscal policy if equilibrium real GDP fallsbelow potential real GDP?65)Page Ref: 945-946/563-564Learning Outcome: Macro-9: Discuss fundamental approaches to fiscal policy.13
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66) To combat a recession with discretionary fiscal policy, Congress and the president shouldA) decrease taxes to increase consumer disposable income.B) raise taxes on interest and dividends, but not on personal income.C) lower interest rates and increase investment by increasing the money supply.D) decrease government spending to balance the budget.Answer: A66)Page Ref: 945-946/563-564Learning Outcome: Macro-9: Discuss fundamental approaches to fiscal policy.
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