ECON 13

अब Quizwiz के साथ अपने होमवर्क और परीक्षाओं को एस करें!

discretionary fiscal policy

A fiscal policy action initiated by an act of Congress

automatic fiscal policy?

An unemployment benefit program

if the United States were on the​ "wrong" side of the Laffer​ curve,

Congress could decrease the tax rate and increase tax revenue.

main reason for the long-run funding problems of Social Security?

Demographic changes.

What happens when government spending is greater than government tax revenues?

There is borrowing by the government and the government debt rises.

If the federal government's expenditures are less than its revenue, there is a

a budget surplus

An automatic fiscal policy is

a fiscal policy action that is triggered by the state of the economy.

fiscal policy actions will increase real GDP in the short run?

an increase in government expenditures

Taxes and transfer payments that stabilize GDP without requiring explicit actions by policymakers are called __________.

automatic fiscal policy

progressive tax system

automatically collects higher taxes as income increases which serves to rein in spending during economic expansions

Every time the federal government runs a budget deficit, the government must:

borrow, which adds to the government debt.

A government that spends more than it collects in taxes experiences a:

budget deficit

A government that collects more in taxes than it spends experiences a:

budget surplus

If the federal government's expenditures are less than its revenue, there is a __________.

budget surplus

Supply-side economists point to the Laffer curve as evidence that higher taxes:

can lead to lower overall government revenues.

automatic stabilizers

changes in fiscal policy that stimulate aggregate demand when the economy goes into a recession without policymakers having to take any deliberate action -smooth fluctuations in the business cycle

Fiscal policy includes

changing​ taxes, transfer​ payments, and government expenditure on goods and services.

The decline in private expenditures that results from an increase in government borrowing is known as:

crowding out

Budget deficits automatically___________ during expansions

decrease

When the government increases the tax rate on labor​ income, the supply of labor

decreases because the tax weakens the incentive to work. But the tax​ doesn't change labor​ productivity, so it​ doesn't change the demand for labor.

A tax on labor income

decreases the supply of labor and the supply curve shifts leftward.

Which of these is the main reason for the long-run funding problems of Social Security?

demographic changes

The American Recovery and Reinvestment Act of 2009 is a clear example of:

discretionary fiscal stimulus.

Generational imbalance

division of the fiscal imbalance between the current and future​ generations, assuming that the current generation will enjoy the existing levels of taxes and benefits.

When do more people receive needs-tested spending/benefits

during a recession

Government policies that increase aggregate demand are called __________.

fiscal stimulus

One of the primary goals of most governments with regard to the economy is:

full employment

Budget deficits automatically __________ during recessions

increase

Higher government spending would do what to the aggregate demand

increase aggregate demand which is represented by a rightward shift

An economy is experiencing a recessionary gap. The government can​

increase expenditure or cut taxes to increase aggregate demand

what is an example that increases aggregate demand

increase government purchases

When the economy is in a recession, the government can:

increase government purchases or decrease taxes in order to increase aggregate demand.

decrease taxes does what to the aggregate demand

increases the aggregate demand

tax wedge

is the gap created between the​ before-tax and​ after-tax wage​ rates

The Laffer curve

is the relationship between the tax rate and the amount of tax revenue collected .

the relationship between the tax rate and the amount of tax revenue collected is called the​ ______ curve.

laffer

Higher taxes and lower money supply would cause the AD curve to shift

left

decreasing the money supply is an example of what

monetary policy

how to calculate government outlays

revenues plus budget balance

A tax cut pays for itself if the economy lies to the​ ______ of the maximum point on the Laffer curve.

right

Discretionary fiscal policy

sed to stabilize the economy but it does not occur automatically.

The government debt is best measured as the:

sum of past budget deficits minus the sum of past budget surpluses.

the laffer curve shows

tax cuts can increase tax revenue

example of automatic fiscal policy

tax revenues

fiscal policy

the use of the budget to achieve macroeconomic objectives

the equilibrium level of employment will​ decrease

the​ before-tax wage rate will​ rise, and the​ after-tax wage rate will fall.

government has to enter the financial markets and borrow money from households to cover the shortfall.

through the issuance of U.S. Treasury securities - bills, notes, and bonds.

economy​ expands

unemployment​ falls, the number of people experiencing economic hardship​ decreases, so​ needs-tested spending decreases.

The tax wedge is the gap between the​ before-tax and​ after-tax

wage rates

When real GDP decreases in a​ recession

wages and profits​ fall, so tax revenues fall.

the tax drives a

wedge between the​ take-home wage and the cost of​ labor

federal budget of the government

•is an annual statement of the outlays (payments made) and receipts (payments received) of the government of the US,

Fiscal imbalance is the

the present value of the​ government's commitments to pay benefits minus the the present value of its tax revenues.

fiscal stimulus combinations

-increasing transfer payments -decreasing tax revenues -increasing expenditures on goods/services directly

Needs-tested spending example

-unemployment benefits -food stamps -medicaid

why government uses budget

1.To finance the specific programs and activities that it thinks are important (like national defense and education) To achieve macroeconomic objectives (like full employment


संबंधित स्टडी सेट्स

Physics of Human Affairs Test #2

View Set

AHIP Business Finance Exam 2 Notes (Chapter 7) 2023

View Set

Evolve:Mental Health Ch 25- Suicide

View Set

Inferential Statistics: Null Hypothesis Testing

View Set