Econ Week 10

Which of the following is the percentage of annual US government spending allocated to foreign aid?

1%

A ______________________ means that government spending and taxes are equal.

Balanced budget

At the beginning of 2009, a government had a total debt of $540 billion dollars. It ended 2009 with a $6 billion dollar budget surplus. In 2010, its budget surplus reached $8 billion dollars. What is the total debt of the government equal to at the end of 2010?

$540 billion

The federal government levies _____________________________ on people who pass assets ____________________________, either after death or during life.

An estate and gift tax; to the next generation

_____________________ are a form of tax and spending rules that can affect aggregate demand in the economy without any additional change in legislation.

Automatic stabilizers

If Canada's economy moves into an expansion while its economy is producing more than potential GDP, then:

Automatic stabilizers will decrease government spending and increase tax revenue.

If the state of Washington's government collects $75 billion in tax revenues in 2013 and total spending in the same year is $74.8 billion, the result will be a:

Budget surplus.

A typical ____________________________ fiscal policy allows government to decrease the level of aggregate demand, through increases in taxes.

Contractionary

If a government reduces taxes in order to increase the level of aggregate demand, what type of fiscal policy is being used?

Expansionary

If government tax policy requires Jane to pay $25,000 in taxes on annual income of $200,000 and Mary to pay $10,000 in tax on annual income of $100,000, then the tax policy is:

Progressive

A ________________________________ is calculated as a flat percentage of income earned, regardless of level of income.

Proportional tax

If South Dakota's governor reports a budget surplus in 2011, that state government likely:

Received more in taxes than it spent in that year.

If the economy is producing less than its potential GDP, _____________________ will show a larger deficit than the actual budget.

The standardized employment budget

When inflation begins to climb to unacceptable levels in the economy, the government should:

Use contractionary fiscal policy to shift aggregate demand to the left.

When inflation begins to climb to unacceptable levels in the economy, the government should:

Use contractionary fiscal policy to shift aggregate demand to the right.

By June, 2010, the U.S. government owed $13.6 trillion dollars ________________ that, over time, has remained unpaid.

In accumulated government debt

If individual income tax accounts for more total revenue than the payroll tax in the U.S., why would over half the households in the country pay more in payroll taxes than in income taxes?

Income tax is a progressive tax

The current level of US government accumulated debt, when measured in nominal dollars:

Is higher than it has ever been.

Which of the following terms is used to describe the set of policies that relate to government spending, taxation, and borrowing?

Fiscal policies

The time lag for monetary policy is typically ________________ the time lag for fiscal policy.

Shorter than