ECON FINAL

The table above has data for a country's government budget. Government outlays for the economy equal _____ billion.

1500

In the above figure, suppose that the economy currently is at point A. If the inflation rate rises and this rise is NOT expected by the public, the economy moves to a point such as point

B

In the above figure, suppose that the economy is a point A when the quantity of money increases. In the short run, the economy will move to point

B

In the above figure, suppose that the economy is at point A when foreign countries begin an expansion and buy more U.S. made goods. In the short run, this change creates a movement to point ______ and an eventual increase in ____.

B; money wage rates

In the above figure, suppose that the economy currently is at point A. if the inflation rate falls and this fall Is unanticipated by the public, the economy moves to a point such as point

E

if the demand pull inflation occurs when the economy is already at potential GDP, then following the initial increase in aggregate demand, the

SAS curve shifts rightward

along the long-run Phillips curve,

actual inflation is equal to expected inflation

The long-run Phillips curve shows the relationship between the inflation rate and the unemployment rate when the

actual inflation rate equals the expected inflation rate

In the above figure,

all of the above answers are correct

a fall in income that results in a decrease in tax revenues is an example of

automatic fiscal policy

The figure above Shows tax revenues and government expenditures in the economy of meadow lake. Potential GDP is $13 trillion. if real GDP is $13 trillion, then the government has a

balanced budget

in 2011, the federal government of happy isle had tax revenues of $1 million, and spent $500,000 on transfer payments, $250,000 on goods and services and $300,000 on debt interest. In 2011, the government of happy isle is

budget deficit of $50,000

if the government has a balanced budget, the total amount of government debt is

constant

all of the following are part of the fiscal policy EXCEPT

controlling the money supply

A reason the government expenditure multiplier is larger than 1 is because

government expenditure generates changes in consumption expenditure

the U.S. government's budget

has mostly been in deficit during the past 30 years

Demand-pull inflation is an inflation that results from an initial _________________

increase in aggregate demand

a government that currently has a budget deficit can balance its budget by

increasing tax revenues by more than it increases outlays

the structural surplus

is the government budget surplus that would exist if the economy was at potential GDP

the largest component of the fiscal imbalance is

medicare

In the figure above, suppose that the economy is at point c. if the inflation rate is Lower than expected,

neither the LRPC nor the SRPC will shift

the largest source of government revenues is

personal income taxes

All of the following are government outlays EXCEPT

purchases of corporate bonds

a discretionary fiscal policy is a fiscal policy that

requires action by the congress

one characteristic of automatic fiscal policy is that it

requires no legislative action by congress to be made effective

in the short run, an increase in the government expenditure will

shift the aggregate demand curve rightward and increase real GDP

the federal government debt is equal to

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

In the above figure, if actual GDP = $15 trillion, there us a ______ budget equal to

surplus; $0.2 trillion

the Laffer curve is the relationship between

tax rates and tax revenue

An example of automatic fiscal policy is when

tax revenues decrease as real GDP decreases

the structural deficit is the deficit

that would occur at full employment

In the above figure, what might have shifted the short-run Phillips curve from SRPC1 to SRPC2 while leaving the long-run Phillips curve unchanged at LRPC?

the expected inflation rate increased

Which branches of the government play a role in the enacting the federal budget?

the president, the house of representatives, and the senate

Fiscal policy involves

the use of tax and spending policies by the government

the government's budget deficit or surplus equals the

total tax revenue minus total government outlays

the long-run Phillips curve is

vertical at the natural unemployment rate