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B) reduce govt spendingin the short-run, expansionary fiscal policy usually willA) increase the price level and increase real GDPcontractionary fiscal policy will most likelyC) reduce the price levelsuppose the econ has a high level of unemployment; this would imply
B) that the econ is operating to the left of the LRAS curve and that govt spending could be increased to reduce unemploymentdiscretionary fiscal policy is so named because itC) involves specific changes in taxes and govt spending undertaken by Congress and the presidentwhen the govt cuts taxes or increases govt spendingD) the AD curve shifts to the rightwhich of the following conditions describes a recessionary gap?B) the short-run equil level of real GDP is below the long-run level of real GDPexpansionary fiscal policy is used toB) combat recessionsin 2009, Congress passed a bill that involved govt spending increases and tax cuts with the purpose of stimulating the U.S. econ; this policy is an example ofC) expansionary fiscal policythe fiscal policy of the U.S. isA) summarized in the budget of the U.S. federal governmentwhich one of the following is an example of discretionary fiscal policy used to correct a recessionary gap?A) a tax decrease passed into law by Congresswhich one of the following is an example of discretionary fiscal policy used to correct an inflationary gap?
A) a tax increase passed into law by Congresswhat does research tell us about the impact of Ricardian equivalence effects on the econ?D) Ricardian equivalence effects may exist, but their magnitudes are unclearthe concept that increased govt spending will lead to lower investment and consumer spending is referred to as theB) crowding-out effectby definition, a direct expenditure offset will occur wheneverA) the govt increases spending in an area that competes with the private sectorif the govt began providing free textbooks to college students who would otherwise have bought their books from the private sector, the govt's action would result inB) a direct expenditure offsetif the govt increases spending and there is a complete direct expenditure offset, thenA) AD and real GDP will not changethe govt wants to increase its spending by $1 billion to stimulate the econ and is counting on the govt spending multiplier to help; taking into account direct expenditure offset effects, what is its best spending option?A) a new cruise missile for the militaryaccording to the supply-side economics, changes in marginal tax rates will have which of the following effects?D) all of the above-change the incentive to work
-change the incentive to save-change the incentive to investone part of the supply-side argument is thatB) lower marginal tax rates can increase total tax revenuesthe supporters of a proposal to increase marginal taxes on those earning over $200,000 a year say this