econ 9,12

Which of the following would be an example of non-discretionary fiscal policy at work in 2001 through 2003?

The increase in unemployment compensation payments in 2001 through 2003.

Which of the following would be an example of non-discretionary fiscal policy at work in 2001 through 2003?

The reduction in tax liabilities attributable to stock market losses in 2001 and 2002.

Which of the following events occurred during the 2000 to 2005 time-frame and had an important impact on the deficit/surplus projections?

The tax cuts of 2001 and 2003.

Which of the following would be an example of discretionary fiscal policy at work in 2001 through 2003?

The tax cuts of 2001 and 2003.

Which of the following would be described as the operational lag?

The time required to get a particular plan implemented with the money getting into peoples' hands.

Following the financial collapse in late 2008, the deficit increased in part because of the

Troubled Asset Relief Program (TARP), increasing federal spending by about $750 billion.

A significant adverse supply-side shock to the U.S. economy in mid-2008 came from

a tripling of world crude oil prices.

Short-run contractionary fiscal policy would result in

aggregate demand moving to the left.

Short-run expansionary fiscal policy would result in

aggregate demand moving to the right.

The purpose of fiscal policy is to

alter the direction of the economy

A budget surplus is the

amount by which revenues exceed expenditures.

Real economic growth during the first two years of President George W. Bush's second term was

approximately 3.2% per year.

Prior to 1950, for most of the years in which there were deficits we were also

at war

Most economists would place the costs of a new public transit system in the

capital budget

The tax cuts of 2001 and 2003 that came in the form of tax rebate checks are good examples of ______ fiscal policy

discretioinary

The Bush tax cuts of 2001 are an example of

discretionary (and expansionary) fiscal policy

The portion of the Obama stimulus package that provided more money (a $25 per week increase) to those who were unemployed is best thought of as

discretionary (and expansionary) fiscal policy.

The 2003 tax rebate is an example of

discretionary fiscal policy.

political problem with discretionary fiscal policy is the

expansionary bias

As a percentage of GDP the national debt consistently

fell from 1950 to 1975.

The tax cuts of 2001 and 2003 that came in the form of tax rebate checks are good examples of

fiscal policy

In 2005-2006, the magnitude of the federal budget deficit decreased because

growth in income increased tax receipts by more than government spending increased.

During the record deficits of the 1980s, the off-budget elements were

in surplus

Generational accounting refers to the

net tax rate of each generation given the taxes they will pay and the benefits they will receive.

The portion of the Obama stimulus package that bolstered state Medicaid plans is best thought of as

non discretionary fiscal policy

he portion of the Obama stimulus package that bolstered state unemployment plans is best thought of as

non-discretionary fiscal policy

The operational lag seemingly did not apply in the case of the 2003 tax cut because it took

only a month or two from the passage of the 2003 tax cut to the issuance to rebate checks.

Many economists look at the Federal Budget and see that it should be broken into

operating and capital budget

An argument has been made that the shrinking deficits of the 1990s were attributable to the

peace dividend that resulted from the end of the Cold War.

A political problem with discretionary fiscal policy is the

political business cycle

A Balanced Budget Amendment would be

procyclical

Projections of the deficit, surplus and debt picture are

rarely accurate even year to year and are highly sensitive to changes in the economy

As a percentage of GDP, the largest deficits in the twentieth century

resulted from World War II.

A recent example of the administrative lag came in the form of it taking

several months in 2003 for Congress to agree on a specific tax cut package even after they had agreed on having one.

Functional finance is that part of the deficit that is attributable to

spending programs or tax cuts passed to stimulate an economy in recession.

Tax rebates such as those approved in 2003 might be

spent on consumption goods. saved in the form of increased bank account balances. used to pay down existing consumer debt.

Which of the following programs is on-budget?

student loans

Compared to Italy and Japan in recent years, the debt as a percentage of GDP in the US is

substantially smaller

Major causes of the increase in U.S. federal budget deficits between 2001 and 2008 were

tax cuts, and spending on homeland security, the war in Iraq and the war in Afghanistan.

Discretionary fiscal policy differs from nondiscretionary fiscal policy in that

the former requires timely decisions whereas the latter is built into the system.

An example of nondiscretionary fiscal policy would be

the operation of the welfare state.

Liberal critics of the Obama stimulus plan focused their concern on

their belief that the package was too small and therefore insufficient to the task.

Which of the following would be described as the recognition lag?

time required to know that there is a recession

If you were to use an Aggregate Supply Aggregate Demand diagram to model nondiscretionary and discretionary fiscal policy in reaction to a negative aggregate demand shock, you would see the aggregate demand curve move

to the left, back toward its pre-shock position as a result of these policies.

The national debt is the

total amount owed by the federal government.

he budget deficit/surplus projections for 2003 that were made in 2000 were wrong because there was an

unanticipated recession

Which of the following would qualify as an aggregate supply shock?

unexpected decrease in oil prices

Which of the following would qualify as an aggregate supply shock?

unexpected increse in oil prices

A recent example of the recognition lag came in the form of it taking

until Fall 2001 to recognize that the recession of 2001 had started in January 2001.

Following the financial collapse in late 2008, the deficit increased in part because of the

weakened state of the economy caused increased spending on unemployment compensation.

If monetary policy is unchanged, the outstanding national debt will increase whenever

when theirs a deficit in the national budget

The predictions that the Obama administration used to justify the stimulus plan have been shown to be (according to most economists)

wrong; the plan did not work as well as their predictions suggested it would, but did have some positive impact.

Since the global recession of 2008 and the Troubled Asset Relief Program (TARP), U.S. total public debt as a share of GDP has hovered around

100%

In which of the time periods below was the surplus as a percentage of GDP the largest?

1940's

n which of the decades below was the inflation-adjusted deficit largest?

1940's

In which of the decades below was the deficit as a percentage of GDP the largest?

1980's

In which of the decades below was the inflation-adjusted deficit largest?

1980's

In which of the periods below was the inflation-adjusted deficit largest?

2009-2011

In which of the periods was the deficit as a percentage of GDP the largest?

2009-2011

Which of the following countries increased its holding of U.S. government debt by the greatest percentage between 1995 and 2005?

Japan