Economics 7-8
Which set of fiscal policy would tend to offset each other?
A decrease in government spending and taxes
The amount of real domestic output that will be purchased at each possible price level is best shown by the:
Aggregate demand curve
If the dollar appreciates in value relative to foreign currencies:
Aggregate demand decreases
A change in aggregate supply would be caused by a change in:
An aggregate supply determinant
Which of the following will cause the aggregate demand curve to shift to the left?
An appreciation in the value of the U.S. dollar
which would be one of the factors that increase aggregate demand?
An increase in consumer wealth
Which combination of factors would most likely increase aggregate demand
An increase in consumer wealth and a decrease in interest rates
which set of events would most likely increase aggregate demand?
An increase in incomes in foreign nations and a depreciation of the dollar
Which of the following will lead to an increase in aggregate demand?
An increase in national incomes aboard
Which set of events would most likely decrease aggregate demand?
An increase in personal income tax rates.
which would most likely increase aggregate supply?
An increase in productivity
When the Federal government cuts taxes and increases spending to stimulate the economy during a period of recession, such actions are design to be:
Countercyclical
A decrease in government spending will cause a(n);
Decrease in aggregate demand
Countercyclical discreationary fiscal policy calls for:
Deficits
The excess capacity of business rises due to:
Demand decrease
When national income in other nations decreases, aggregate:
Demand decreases
The short-run aggregate supply curve shows that:
Direct relationship between the price level and real GDP purchased
If congress passes legislation to cut taxes and increase government spending to counter the effects pf a severe recession, this would be an example of an
Expansionary fiscal
If the congress passes legislation to cut taxes to counter the effects of a severe recession, then this would be an example of a :
Expansionary fiscal policy
Changes in government spending and tax revenues for the purpose of achieving a full-employment and noninflationary level of domestic output is called:
Fiscal policy
When the Federal government uses taxation and spending actions to stimulate the economy it is conducting:
Fiscal policy
The aggregate demand curve shows the:
Inverse relationship between the price level and real GDP purchased
When changes to taxes and spending occur in the economy without explicit action by the Federal government, such policy is:
Nondiscretionary
The council of economic advisors gives economic advice to the:
President
The aggregate demand curve is the relationship between the:
Price level and the purchasing of real domestic output
A fall in prices of imported resources will cause aggregate:
Supply to increase
Fiscal policy is enacted through changes in:
Taxation and government spending
An increase in the real value of stock prices, which is independent of a change in the price level, would affect aggregate demand due to:
Wealth effect
A contractionary fiscal policy can be illustrated by an:
decrease in aggregate demand
A decrease in net exports will cause a(n):
decrease in aggregate demand
An increase in personal income tax rates will cause a(n):
decrease in aggregate demand
An increase in taxes on consumers will most likely cause a(n):
decrease in aggregate demand.
If the dollar depreciates in value relative to foreign currencies. aggregate:
demand increases
when the federal government takes action to change taxes and spending to stimulate the economy such policy is:
discretionary
An expected rise in rate of inflation for consumer goods will:
increase aggregate demand
An increase in expected future income will:
increase aggregate demand
Which combination of fiscal policy actions would contractionary for an economy experienceing severe demand-pull inflation
increases taxes and decrease government spending
One advantage of automatic fiscal policy over discretionary fiscal policy
is not subject to the timing problems
which would shift the aggregate demand curve? a change in
net exports spending
As the economy declines, the collection of persional income tax revenues automatically falls. this relationship
provides built in
as the economy expands, the collection of personal income tax
provides built in
If the encomony is to have automatic stabilizers, when real GDP rises:
tax revenues should rise
if the government wishes to increase the level of real GDP, it might reduce:
taxes
An increase in aggregate demand is most likely to be caused by a decrease in:
the tax rates on household income
Which combination of fiscal policy actions would be most stimulative for an economy in a deep recession?
decrease taxes and increase government spending
Actions by the Federal government that decrease the progressivity of the tax system:
decrease the affects of automatic stabilizers
An expansionary fiscal policy can be illustrated by an:
increase in aggregate deman
An increase in government spending will cause a(n):
increase in aggregate demand
The combination of fiscal policies that would reinforces each other and be most expansionary would be a(n):
increase in government spending and a decrease in taxes
If Congress raised taxes on businesses, this action would:
increase per-unit production costs and thus decrease aggregate supply
Contractionary fiscal policy is named because it
is aimed
Expansionary fiscal policy is named because it
is designed
A movement along the aggregate demand curve would be caused by a change in:
the price level
The slope of the immediate-short-run aggregate supply curve is based on the assumption that:
Both input and output prices are fixed
If the congress passes legislation to increase government spending to counter the effects of a recession, then this would be an example of a(n):
Expansionary fiscal policy
When the price level falls:
Holders of financial assets with fixed money values increase their spending
If the U.S. dollar depreciates in value relative to foreign currencies, then this will:
Increase aggregate demand
A decline in the quantity of real output demanded along the aggregate demand curve is result of a(n):
Increase in the price level
Which are contractionary fiscal policy?
Increased taxation and decrease government spending
IN an aggregate deman and aggregate supply graph, a contractionary fiscal policy can be illustraded by a:
Leftward shift in the demand curve
An aggregate supply curve shows the:
Level of real domestic output which will be produced at each possible price level
Fiscal policy refers to the:
Manipulation of government spending and taxes to stabilize
The upward slope of the short-run aggregate supply curve is based on the assumption that:
Nominal wages and other resource costs do not respond to price level changes
If government tax revenues changes automatically and in a countercyclical direction over the course of the business cycle
Nondiscretionary
Which would most likely shift the aggregate supply curve? a change in:
Prices of imported resources
Which would be one of the factors that shift the aggregate demand curve? a change in:
Profit expectations on investment projects
Which group has direct responsibility for providing analysis, advice and assistance to the U.S. President economic matters?
The council of economic advisors
In the US income taxes and transfer payments
act as automatic
When national income in other nations increases:
aggregate demand increases
Discretionary fiscal policy refers to:
changes in taxes and government expenditures made by Congress to stabilize the economy
If the Congress passes legislation to decrease government spending to control demand-pull inflation, then this would be an example of a(n):
contractionary fiscal policy
If the congress passes legislation to raise taxes to control demand-pull inflation, then this would be an examply of a(n):
contractionary fiscal policy
An expected decline in the prices of consumer goods will:
decrease aggregate demand
If the prices of imported resources increase, then this event would most likely
decrease aggregate supply
The set of fiscal policies that would be most contractinary would be a(n):
decrease in government spending and an increase in taxes