Easy
Fiscal policy is carried out primarily by:
the federal government.
The cyclically adjusted deficit is the difference between annual government expenditures and tax revenues that would have occurred if the economy was:
at full employment.
Increased government spending for investments such as highways or harbours financed by increasing the public debt would most likely:
increase the amount of public capital stock in the future.
If the cyclically adjusted budget shows a deficit of about $100 billion and the actual budget shows a deficit of about $150 billion, it can be concluded that there is:
a cyclical deficit.
If the cyclically adjusted budget deficit increases from $200 billion to $250 billion and GDP remains constant over the two years:
fiscal policy is expansionary.
Which of the following countries had the highest publicly held debt as a percentage of GDP in 2015?
Japan
Who among the following owned the smallest percentage of Canada's public debt in 2016?
The Bank of Canada
Who among the following owned the largest percentage of Canada's public debt in 2016?
Public and chartered banks
Which of the following phases of a business cycle generates cyclical deficit (a movement from a surplus to a deficit) as a by-product?
Recession
Contractionary fiscal policy will do what to the government budget, assuming that was balanced at the start?
A budget surplus
Contractionary fiscal policy will do what to the government budget, assuming that was balanced at the start?
A budget surplus
Discretionary fiscal policy refers to:
changes in taxes and government expenditures made by Parliament to stabilize the economy.
Suppose that in an economy with a MPC of .5 the government wanted to shift the aggregate demand curve rightward by $80 billion at each price level to expand real GDP. It could:
increase government spending by $40 billion.
Discretionary fiscal policy is so named because it:
involves specific changes in T and G undertaken expressly for stabilization purposes at the option of Parliament.
In an economy, the government wants to increase aggregate demand by $50 billion at each price level to increase real GDP and reduce unemployment. If the MPS is .4, then it could increase government spending by:
$20 billion.
Within the aggregate demand and aggregate supply framework, fiscal policy that emphasizes activist government policies to stabilize the economy would view cutting personal income taxes as primarily a shift:
right in the aggregate demand curve.
In a certain year the aggregate demand at the existing price level consists of $100 billion of consumption, $40 billion of investment, $10 billion of net exports, and $20 billion of government purchases. Full-employment GDP is $200 billion. To obtain full employment under these conditions the government should:
reduce tax rates and increase government spending.
Countercyclical discretionary fiscal policy calls for:
deficits during recessions and surpluses during periods of demand-pull inflation.
Discretionary fiscal policy will stabilize the economy most when:
deficits are incurred during recessions and surpluses during inflations.
A tax reduction of a specific amount will be more expansionary, the:
larger is the economy's MPC.
Which are contractionary fiscal policies?
increased taxation and decreased government spending
In an aggregate demand and aggregate supply graph, a contractionary fiscal policy can be illustrated by a:
leftward shift in the aggregate demand curve.
A contractionary fiscal policy is shown as a:
leftward shift in the economy's aggregate demand curve.
Which combination of fiscal policy actions would most likely be offsetting?
increase in taxes and government spending
Contractionary fiscal policy is so named because it:
is aimed at reducing aggregate demand and thus achieving price stability.