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Fiscal Policy
Expansionary Policy
Contractionary Policy
Tax Progressivity and Built - in Stability
Problems
100
Expansionary policy and ________ make up the two types of fiscal policy
What is Contractionary Policy?
100
Expansionary fiscal policy is used to close a _______ gap?
What is recessionary?
100
Contractionary Fiscal Policy is implemented when the economy is under an ______
What is inflation?
100
A built-in stability system _____ the budget deficit during a recession without requiring explicit action from policy makers
What is increase it?
100
There are three timing problems when implementing fiscal policies: recognition lag, administrative lag, and ________
What is operational lag
200
Fiscal policy is designed to encourage ______ economic growth.
What is positive?
200
Expansionary Fiscal Policy includes an increase in ______ and a decrease in taxes
What is government spending?
200
An inflation is an overall increase in total______
What is price levels?
200
A built in stability system _____ the budget surplus during an expansion without requiring explicit action from the policy makers.
What is increase it?
200
_________ lag is the time difference between the beginning of the recession or inflation and the awareness that a recession or inflation has happened.
What is recognition?
300
Fiscal policy is established to achieve this _______ (measured at 6-7% unemployment rate)
What is full employment?
300
The collection of _____ is decreased when an expansionary policy is implemented.
What is taxes?
300
Aggregate demand _____, when a contractionary fiscal policy is established
What is decreases
300
There are three levels of progressivity: progressive, proportional and this other level.
What is regressive?
300
There is a tendency for political administration to reduce taxes and increase government spending ______ an election.
What is before
400
The 6-7% unemployment rate considers Seasonal and Frictional unemployment but does not include this type of unemployment
What is Cyclical Unemployment?
400
An expansionary fiscal policy causes the aggregate demand curve to move to the ______
What is right?
400
When taxes are increased due to the implementing of a contractionary policy, consumer spending _____
What is decreases?
400
In this level of progressivity, the more you make, the more you get taxed.
What is progressive?
400
_______ is a decrease in private investment caused by a higher interest rate.
What is Crowding Effect?
500
Fiscal policy helps to control _____, which is measured at 1-3%, or at it's core, 1-2%
What is inflation?
500
If Federal Budget is balanced at the onset of recession, an expansionary fiscal policy will lead to __________
What is budget deficit?
500
The aggregate demand curve moves to the ____, when a contractionary fiscal policy is established
What is left?
500
The more progressive the system, the ______ the economy's built-in stability.
What is greater?
500
Crowding Effect results from the Government's _______ in financial borrowing.
What is increase