Chapter 30 Quiz Government Budgets and Fiscal Policy

When the government passes a new law that explicitly changes overall tax or spending levels, it is enacting: A.) discretionary fiscal policy. B.) progressive fiscal policy. C.) regressive fiscal policy. D.) fiscal policy.

A.) discretionary fiscal policy.

A ________________________ means that government spending and taxes are equal. A.) fiscal budget B.) balanced budget C.) contractionary fiscal policy D.) discretionary fiscal policy

B.) balanced budget

A typical ________________________ fiscal policy allows government to decrease the level of aggregate demand, through increases in taxes. A.) expansionary B.) contractionary C.) discretionary D.) standardized

B.) contractioanry

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: A.) regressive. B.) progressive. C.) proportional. D.) optional.

B.) progressive

What do goods like gasoline, tobacco, and alcohol typically share in common? A.) a progressive tax is imposed on each of them. B.) A regressive tax is imposed on each of them. C.) They are all subject to government excise taxes. D.) They are all subject to government fiscal taxes.

C.) They are all subject to government excise taxes.

If a country's GDP decreases, but its debt increases during that year, then the country's debt to GDP ratio for the year will _______________________ in proportion to the magnitude of the changes. A.) decrease B.) increase or decrease C.) increase D.) decrease because GDP decreased

C.) increase

If the government for the state of Washington collect $65.8 billion in tax revenues in 2013 and total spending in the same year is $74.8 billion, the result will be: A.) an increase in payroll tax. B.) an increase in excise tax. C.) a budget surplus. D.) a budget deficit.

D.) a budget deficit.

During a recession, if a government uses an expansionary fiscal policy to increase GDP, the: A.) aggregate supply curve will shift to the right. B.) aggregate supply curve will shift to the left. C.) aggregate demand curve will shift to the left. D.) aggregate demand curve will shift to the right.

D.) aggregate demand curve will shift to the right.

If a country's GDP increases, but its debt also increase during that year, then the country's debt to GDP ration for the year will ________________________ in proportion to the magnitude of the changes. A.) decrease because GDP increased B.) increase because its debt increased C.) increase D.) increase or decrease

D.) increase or decrease

When the share of individual income tax collected by the government from people with higher incomes is smaller than the share of tax collected from people with lower incomes, then the tax is _______________________. A.) optional B.) proportional C.) progressive D.) regressive

D.) regressive