Econ Final
The ___________________ is the institution designed to control the quantity of money in the economy and also to oversee the
central bank: safety and stability of the banking system
Which of the following is the percentage of annual US government spending allocated to foreign aid?
1%
A ______________________ is created each time the federal government spends more than it collects in taxes in a given year.
A budget deficit
A ______________________ means that government spending and taxes are equal.
balanced budget
Which of the following terms is used to describe the proportion of deposits that banks are legally required to deposit with the central bank?
reserve requirments
A government collects $70 billion quarterly in tax revenue. Each year it allocates $15 billion to the justice system and $29 billion for the administrative costs. What percentage of its total annual tax revenue is left for allocation to the remaining categories of government spending?
84.29%
If the government for the state of Washington collects $65.8 billion in tax revenues in 2013 and total spending in the same year is $74.8 billion, the result will be
A budget deficit
When a Central Bank takes action to decrease the money supply and increase the interest rate, it is following:
a contractionary monetary policy
A typical ____________________________ fiscal policy allows government to decrease the level of aggregate demand, through increases in taxes
contractionary
n 2010, Microsoft will pay corporate income tax to the federal government based on the company's
corporate profits
What term is used to describe the interest rate charged by the central bank when it makes loans to commercial banks?
discount rate
When the government passes a new law that explicitly changes overall tax or spending levels, it is enacting:
discretionary fiscal policy
Assume that laws have been passed that require the federal government to run a balanced budget. During a recession, the government will want to implement _____________________, but may be unable to do so because such a policy would ____________
expansionary fiscal policy; lead to a budget deficit
By June, 2010, the U.S. government owed $13.6 trillion dollars ________________ that, over time, has remained unpaid.
in accumilated government debt
The current level of US government accumulated debt, when measured in nominal dollars:
is higher than it has ever been
A __________________________ policy will cause a greater share of income to be collected from those with high incomes than from those with lower incomes.
progressive tax
A government collects $700 billion annually in tax revenue. Each year it allocates $70 billion to the justice system and $130 billion for its own administrative costs. What percentage of annual tax revenue is allocated to these two categories of government spending?
28.57%
Regardless of the outcome in the long run, ______________________ always has the effect of stimulating the economy in the short run.
expansionary monentary policy
During a recession, if a government uses an expansionary fiscal policy to increase GDP, the:
the aggregated demand curve will shift the the right
When the central bank lowers the reserve requirement on deposits:
the money supply increases and the interest rates decrease
according to the basic quantity equation of money, if price and output fall while velocity increases, then
the quantity of money will fall
If the economy is producing less than its potential GDP, _____________________ will show a larger deficit than the actual budget.
the standardize employemnt budget
In 2009, the U.S. government spent $1.4 trillion more than it collected in taxes. This deficit was about?
10% of the size of the US GDP in 2009
A government annually collects $230 billion in tax revenue and allocates $29 billion to its universal healthcare spending. What percentage of this government's budget is spent on healthcare?
12.60%
A government collects $600 billion annually in tax revenue. Each year it allocates $35 billion to healthcare and $50 billion for education. What percentage of annual tax revenue is allocated to these two categories of government spending?
14.16%
A government annually allocates $5 billion of its total tax revenue to weather related disaster relief, $21 billion to healthcare and $11 billion to education. If the government's quarterly tax revenue is $33 billion, what percentage of its budget is allocated annually to healthcare?
15.90%
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 b
If a government reduces taxes in order to increase the level of aggregate demand, what type of fiscal policy is being used?
Expansionary
The government can use _____________ in the form of ____________________ to increase the level of aggregate demand in the economy.
an expansionary fiscal policy; an increase in goverment spending
The Central Bank has raised its reserve requirements from 10% to 12%. If Southern Bank finds that it is not holding enough in reserves to meet the higher requirements, then it will likely:
borrow for the short term from the central bank
A central bank that wants to increase the quantity of money in the economy will
buy bonds in open market operations
If you were to survey central bankers from around the world and ask them what they believe the primary task of monetary policy should be, what would the most popular answer likely be?
fighting inflation
Which of the following terms is used to describe the set of policies that relate to government spending, taxation, and borrowing?
fiscal policies
If a Central Bank decides it needs to decrease both the aggregate demand and the money supply, then it will:
follow tight monetary policy
When a Central Bank makes a decision that will cause an increase in both the money supply and aggregate demand, it is:
following a loose monetary policy
When the Central Bank acts in a way that causes the money supply to increase while aggregate demand remains unchanged, it is:
following an expansionary monetary policy.
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
If a country's GDP increases, but its debt decreases during that year, then the country's debt to GDP ratio for the year will _______________ in proportion to the magnitude of the changes.
increase or decrease
Currently, the US government accumulated debt to GDP ratio
is lower than its historic high point
When banks hold excess reserves because they don't see good lending opportunities
it negatively affect expansionary monantery policy
will often cause monetary policy to be considered counterproductive because it makes it hard for the central bank to know when the policy will take effect?
long and variable tim lags
If government tax policy requires Bill to pay $20,000 in taxes on annual income of $200,000 and Paul to pay $10,000 in tax on annual income of $100,000, then the tax policy is:
proportional
Which of the following is described as an innovative and nontraditional method used by the Federal Reserve to expand the quantity of money and credit during the recent U.S. recession?
quantitive easing
if South Dakota's governor reports a budget surplus in 2011, that state government likely
recieved more in taxes than it spent that year
If government tax policy requires Peter to pay $15,000 in tax on annual income of $200,000 and Paul to pay $10,000 in tax on annual income of $100,000, then the tax policy is:
regressive
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 ____________________.
regressive
When a country's economy is producing at a level that exceeds its potential GDP, the standardized employment budget will show a __________________ than the actual budget.
smaller deficit
When the Federal Reserve announces that it is implementing a new interest rate policy, the ____________________ will be affected
the federal funds rate
When the central bank decides it will sell bonds using open market operations
the money supply decreases
What do goods like gasoline, tobacco, and alcohol typically share in common?
they are all subject to government excise tax
When increasing oil prices cause aggregate supply to shift to the left, then
unemployment and inflation increase