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| When the Federal government uses taxation and spending actions to stimulate the economy it is conducting: | Fiscal policy |
|---|---|
| When changes in taxes and government spending occur in the economy without explicit action by Congress, such policy is: | Nondiscretionary |
When the federal government cuts taxes and increases spending to stimulate the economy during a period of recession such actions are design to be?
When the federal government cuts taxes and increases spenidng to stimulate the economy during a period of recession, such actions are designed to be: passive.
What is it called when the government changes its spending or tax policies to solve economic problems?
Fiscal policy is the means by which a government adjusts its spending levels and tax rates to monitor and influence a nation’s economy. These two policies are used in various combinations to direct a country’s economic goals.
What is it called when the federal government uses spending and tax policy to intervene in the economy?
Fiscal policy is the use of government spending and taxation to influence the economy.
When changes in taxes and government purchases occur in the economy without explicit actions by Congress such changes are referred to as?
income tax revenues and transfer payments increase. When changes in taxes and government purchases occur in the economy without explicit action by Congress, such changes are referred to as… ( ch.8) automatic stabilizers.
Which is regarded as an automatic stabilizer in the economy?
The best-known automatic stabilizers are progressively graduated corporate and personal income taxes, and transfer systems such as unemployment insurance and welfare. Automatic stabilizers are called this because they act to stabilize economic cycles and are automatically triggered without additional government action.
Which policy has the most immediate response to address an economic problem?
The most immediate effect of fiscal policy is to change the aggregate demand for goods and services. A fiscal expansion, for example, raises aggregate demand through one of two channels.
What’s the difference between decreased taxes and increased spending?
D. Decrease taxes, but make no change in government spending A. Increased government spending or increased taxation, or a combination of the two actions B. Increased government spending or decreased taxation, or a combination of the two actions C.
Which is fiscal policy would be the most contractionary?
Larger is the economy’s MPS C. Smaller is the economy’s MPC D. Larger is the unemployment rate A. Smaller is the economy’s MPC B. Flatter is the economy’s aggregate supply curve C. Smaller is the economy’s MPS D. Less the economy’s built-in stability Which fiscal policy would be the most contractionary? A.
How much should the government raise taxes to achieve its objective?
A $40 billion decrease in government spending and a $10 billion decrease in taxes An economy is experiencing a high rate of inflation. The government wants to reduce consumption by $36 billion to reduce inflationary pressure. The MPC is .75. By how much should the government raise taxes to achieve its objective?
Why does the government want to reduce consumption?
An economy is experiencing a high rate of inflation. The government wants to reduce consumption by $36 billion to reduce inflationary pressure. The MPC is .75. By how much should the government raise taxes to achieve its objective? A. $6 billion B. $9 billion C. $12 billion D. $16 billion
