Economics 201: Chapter 13 Quiz

If government increases the size of its cyclically adjusted surplus, we can

assume that government is having a contractionary effect on the economy.

The economic burden of World War 2 for the United States was primarily

borne by the persons who lived during the war period.

The time that elapses between the beginning of a recession or an inflationary episode and the identification of the macroeconomic problem is referred to as a(n)

recognition lag.

The cyclically adjusted budget estimates the federal budget deficit or surplus if

the economy were at full employment.

In 2018, about ____ percent of the U.S. public debt was held by the U.S. government and Federal Reserve.

37

An appropriate fiscal policy for severe demand-pull inflation is

a tax rate increase.

In 2018, the U.S. federal debt held by the public was

about 76 percent of the size of the GDP.

The lag between the time that the need for fiscal action is recognized and the time action is actually taken is referred to as the

administrative lag

From 2010 to 2015, the actual as well as the cyclically adjusted federal budget deficits as percentages of GDP in the U.S

decreased

A given reduction in government spending will dampen demand-pull inflation by a greater amount when the

economy's aggregate supply curve is steep.

Suppose the government purposely changes the economy's cyclically adjusted budget from a deficit of 0 percent of real GDP to a deficit of 3 percent of real GDP. The government is engaging in a(n)

expansionary fiscal policy.

Since 2002, the United States has had

large federal budget deficits.

Most economists believe that fiscal policy is

not as good as monetary policy for month-to-month stabilization.

Increases in the federal budget deficit from 2007 to 2009 were caused

primarily by a combination of recession and expansionary fiscal policy.

The cyclically adjusted budget refers to

the size of the federal government's budgetary surplus or deficit when the economy is operating at full employment.

true or false? Fiscal policy swung from contractionary to expansionary in 2002

true

Built-in stability means that

with given tax rates and expenditures policies, a rise in domestic income will reduce a budget deficit or produce a budget surplus, while a decline in income will result in a deficit or a lower budget surplus.

A procyclical fiscal policy, like those of many state and local governments in the United States, tends to

worsen recessions or inflation.