SuperTeacherTools

Chapter30 Answer Key

Play This Game




Discretionary/Fiscal
#1 Fiscal policy is carried out primarily by: the Federal government; state and local governments working together; state governments alone; or local governments alone. The Federal government
#2 Fiscal policy refers to the manipulation of ____________ ____________ and ___________to stabilize domestic output, employment, and the price level. government spending, taxes
#3 _________________ fiscal policy refers to changes in taxes and government expenditures made by Congress to stabilize the economy. Discretionary
#4 Discretionary fiscal policy will stabilize the economy most when ____________ are incurred during recessions and ____________ during inflations. deficits, surpluses
#5 Countercyclical discretionary fiscal policy calls for: surpluses during recessions and deficits during periods of demand-pull inflation; deficits during recessions and surpluses during periods of demand-pull inflation; surpluses during both recessions and periods of demand-pull inflation; or deficits during both recessions and periods of demand-pull inflation. deficits during recessions and surpluses during periods of demand-pull inflation
GDP, Surpluses, and Deficits
#1 Tax revenues government transfer payments and subsidies = net tax revenues, and net tax revenues automatically or passively increase as the GDP _______ and automatically or passively decrease as the GDP_______; which serves as a _______-___ ___________ of the economy. rises, falls, built-in stabilizer
#2 As GDP increases, the average tax rates will remain constant in a ______________tax system, increase in a _______________tax system, and decrease in a ______________tax system, which means there is more built-in stability (or net tax responsiveness) for the economy in _______________ tax systems. proportional, progressive, regressive, progressive
#3 When surpluses __________ and deficits__________, fiscal policy is expansionary. decrease, increase
#4 _________ _______ at any time is the sum of the Federal governments previous annual deficits any annual surpluses. Public debt
#5 The effect of a government surplus on the equilibrium level of GDP is substantially the same as: a decrease in saving; an increase in saving; an increase in consumption; or an increase in investment. an increase in saving
Cuts and Spending
#1 An economist who favors __________ government would recommend tax cuts during recession and reductions in government spending during inflation; while an economist who favored ___________ government would recommend increases in government spending during recession and tax increases during inflation. smaller, expanded
#2 Assume the economy is at full employment and that investment spending declines dramatically. If the goal is to restore full employment, government fiscal policy should be directed toward: an equality of tax receipts and government expenditures; an excess of tax receipts over government expenditures; or an excess of government expenditures over tax receipts. an excess of government expenditures over tax receipts
#3 An appropriate fiscal policy for a severe recession is: a decrease in government spending; a decrease in tax rates; appreciation of the dollar; or an increase in interest rates. a decrease in tax rates
#4 An appropriate fiscal policy for severe demand-pull inflation is: an increase in government spending; depreciation of the dollar; a reduction in interest rates; or a tax rate increase. a tax rate increase
#5 Which of the following represents the most expansionary fiscal policy: a $10 billion tax cut; a $10 billion increase in government spending; a $10 billion tax increase; or a $10 billion decrease in government spending. a $10 billion increase in government spending
True or False
#1 When current government expenditures equal current tax revenues and the economy is achieving full employment the standardized budget has neither a deficit nor a surplus. True
#2 When current government expenditures exceed current tax revenues and the economy is achieving full employment the standardized budget has a surplus. False
#3 When current tax revenues exceed current government expenditures and the economy is achieving full employment the standardized budget has a deficit. False
#4 Suppose the government cuts taxes to keep the economy's standardized budget in balance when the economy is expanding, the government is engaging in a neutral fiscal policy. True
#5 An effective expansionary fiscal policy will decrease the standardized deficit but increase the cyclical deficit False
Expansionary and Contractionary
#1 The purpose of ______________ fiscal policy is to stimulate the economy by increasing aggregate demand. expansionary
#2 _____________ fiscal policy will create a budget deficit, which is when government spending is greater than tax revenues. Expansionary
#3 The purpose of ______________ fiscal policy is to reduce aggregate demand pressures that increase the price level. contractionary
#4 Contractionary fiscal policy will create a budget surplus, which is when ________________are greater than________________. tax revenues, government spending
#5 Expansionary fiscal policy is so named because it: involves an expansion of the nation's money supply; necessarily expands the size of government; is aimed at achieving greater price stability; or is designed to expand real GDP. is designed to expand real GDP
Final Question


usergames/Nov201045/jeopardy1289439956.php--0