ch 16 quiz econ

less than

As a​ result, when AD shifts to the​ right, in reality the change in real GDP will be ______________ it would be if the price level were constant.

Example​ (A): Expansionary fiscal policy. Example​ (B): Contractionary fiscal policy.

Consider the figures below. Determine which combination of fiscal policies shifted AD 1 to AD 2 in each figure and returned the economy to​ long-run macroeconomic equilibrium.

Yes, due to crowding out.

Does government spending ever reduce private​ spending?

upward sloping

In​ reality, the SRAS is

Expansionary fiscal policy increases does not change increases ​ decreases

Suppose the economy is in equilibrium in the first period at point​ (A). In the second​ period, the economy reaches point​ (B). We would expect the federal government to pursue what type of policy in order to move AD 2 to AD Subscript 2 comma policy and reach equilibrium​ (point C) in the second​ period? Actual real​ GDP: Potential real​ GDP: Price​ level: ​Unemployment:

smaller

The higher the tax​ rate, the ______ the multiplier effect.

False

The multiplier effect is only a consideration for increases in government purchases.

constant .

The simple multiplier effect shows the resulting change in real GDP due to an increase in government purchases or a decrease in taxes assuming that the price level is

D. All of the above. is the answer!!!!!!!!!!!! A. Greater clarity of the decisions made by households and firms. B. Increased efficiency of households and firms. C. Resources from the tax preparation industry freed up for other endeavors.

What are the gains to be had from simplifying the tax​ code?

Government purchases are included in government expenditures

What is the difference between federal government purchases​ (spending) and federal government​ expenditures?

When borrowing is used for​ long-lived capital goods.

When is it considered​ "good policy" for the government to run a budget​ deficit?