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