Econ Chpt 15 Fiscal Policy

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5. The Office of Management and Budget (OMB) is part of the

CORRECT: Executive Office of the President.

15. The federal government's fiscal year runs from

CORRECT: October 1 through September 30.

8. What was the budget situation of the federal government at the end of the twentieth century?

CORRECT: There was a budget surplus.

19. Which is a short-term bond that must be paid within a year or less?

CORRECT: Treasury bill

20. When government revenues and expenditures are equal, there is

CORRECT: a balanced budget.

3. Which of the following might be part of an expansionary policy?

CORRECT: a tax cut

17. A government program that changes automatically depending on GDP and a person's income is an example of

CORRECT: an automatic stabilizer.

4. According to the Laffer curve,

CORRECT: both a high and low tax rate can produce the same revenues.

12. A supply-side economist would be in favor of

CORRECT: cutting taxes.

16. The main idea of the multiplier effect is that

CORRECT: every dollar the government spends creates a greater than one dollar change in economic output.

9. What type of fiscal policies did President Franklin D. Roosevelt carry out after his election in 1932?

CORRECT: expansionary

10. The federal budget process begins with

CORRECT: federal agency estimates.

18. Classical economics states that

CORRECT: markets should be allowed to regulate themselves.

2. If the President vetoes the budget, Congress

CORRECT: needs a 2\/3 majority to override the President's veto.

6. A budget surplus occurs when

CORRECT: revenues exceed expenditures.

11. John Maynard Keynes believed that to end the Great Depression, government should

CORRECT: spend and buy more goods and services.

1. Which act created a "pay-as-you-go" system that requires Congress to raise enough revenue to cover increases in direct spending?

CORRECT: the 1990 Budget Enforcement Act

7. The loss of funds for private investment due to government borrowing is known as

CORRECT: the crowding-out effect.

14. The national debt is

CORRECT: the total amount of money the federal government owes to bondholders.

13. What is the main goal of a government's fiscal policy?

CORRECT: to maintain a stable economy


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