The graphical relationship between the price level and the amount of real GDP that businesses will offer for sale is known as the _______ curve. Its purpose is to expand or shrink the economy as needed. Suppose the government increases spending to fund tuition assistance for qualified college students. C)stay the same unless the government changes the tax rates. B. an increase in government spending. When you have completed your exam and reviewed your answers, click Submit Exam. Which one of the following statements about fiscal policy is correct? A $30 billion decrease in government spending C. A $30 billion tax cut D. A $30 billion tax increase. B)the money supply. D. involves an expansion of the nation’s money supply. D)acts as an automatic contractionary fiscal policy. In the late 1990s the U.S. stock market boomed, causing U.S. consumption to rise. C. planned investment equals saving. Fiscal policy refers to the use of the government budget to affect the economy. 80 percent. 19. D. households, businesses, and government, but not international trade. D)rise, and sales tax revenues will rise. the authority that the President has to change personal income tax rates. Which one of the following statements about efficiency wages is correct? FISCAL POLICY AND THE AD/AS MODEL
Discretionary fiscal policy refers to the deliberate manipulation of taxes and government spending by Congress to alter real domestic output and employment, control inflation, and stimulate economic growth. A. 2.2.1 Discretionary fiscal policy as a stabilization tool 167.Fiscal policies that require no government action but that are expansionary when the economy contracts and contractionary when the economy expands are known as: 168.Because the revenue from personal income taxes increases as disposable income increases: B)the marginal propensity to consume decreases as income increases. Which one of the following statements about lump-sum taxes is correct? Methodologically, the fluctuation of … Question 8. A)interest rates. A. real-balances B. shift-of-spending C. foreign purchases D. output. In building the aggregate expenditures model, Keynes believed that A. economies are normally at full employment and thus frequently susceptible to bouts of inflation. It can be of two types, discretionary and nondiscretionary fiscal policy (Carrere & Melo, 2008). Answers will not be recorded until you hit Submit Exam. The government engages in fiscal policy to align real domestic output with current employment levels, accelerate economic growth, and dampen inflation. D. full-employment. B. A. Congress increases personal income tax rates to balance the budget. C. level of income. C. government intervention into the economy is the primary cause of business cycle fluctuations. the multiplier effect of government purchases. 12. A. 164.When the economy expands, income tax receipts will: A)rise, but sales tax revenues will remain the same. Countercyclical discretionary fiscal policy calls for: C. A lump-sum tax means that the same amount of tax revenue is collected at each level of GDP. Automatic stabilizers will _____ the _____ effect of the _____ in aggregate demand. A. aggregate supply B. investment supply C. investment demand D. aggregate demand. A private closed economy includes A. households, businesses, and international trade, but not government. 162.Suppose the government increases spending to fund tuition assistance for qualified college students. Discretionary fiscal policy refers to. 170.Automatic stabilizers are government spending and taxation changes that cause fiscal policy to be _____ when the economy contracts. B. "A discretionary fiscal policy is a monetary policy that is created and initiated by a government entity as a means of dealing with events and trends that are t… Fiscal policy tries to nudge the economy in different ways through either expansionary or contractionary policy, which try to either increase economic growth through taxes and spending or … Automatic stabilizers will _____ the _____ effect of the _____ in aggregate demand. expansionary or tight fiscal policy Automatic fiscal stabilisers – If the economy is growing, people will automatically pay more taxes ( VAT and Income tax) and the Government will spend less on unemployment benefits. Automatic stabilizers will _____ the _____ effect of the _____ in aggregate demand. The discretionary fiscal policy refers to changes in the tax rate or the level of government spending to sti... Want to see the full answer? Its purpose is to expand or shrink the economy as needed. Fiscal policy is largely based on ideas from John … Exogenous discretionary fiscal policy refers to a change in spending or revenue that is not induced by the macroeconomic environment, whereas, the endogenous discretionary fiscal policy includes changes in spending or revenue in response to changing economic conditions. 2. 15. In a private closed economy, when aggregate expenditures equal GDP, then A. disposable income equals consumption minus saving. changes in taxes and government expenditures made by Congress to stabilize the economy. The discretionary fiscal policy refers to the fiscal policy of the government that is used according to the need of the government. B) the authority that the President has to change personal income tax rates. Fiscal policy refers to the altering of the interest rate to change aggregate demand. discretionary fiscal policy as well. The expected rate of return on this tool is A. B)fall, but sales tax revenues will rise. Consider a European call option and a European put option on a non-dividend-paying stock. Suppose that a new machine tool having a useful life of only one year costs $80,000. There are two types of fiscal policies that the government can make use according to its discretion. This includes government spending and levied taxes. The amount by which federal tax revenues exceed federal government expenditures during a particular year is the A. budget surplus. Questions 1 to 20: Select the best answer to each question. Discretionary fiscal policy refers to changes in: government spending or taxes to close a recessionary or inflationary gap. Discretionary fiscal policy refers to the changes in taxes and transfers that occur as GDP changes. The policy is said to … D. changes in aggregate expenditures are unable to affect the level of real output in the economy. The higher the influence of the automatic stabilizers, the lesser the economy stimulus packages should be adopted by an economy which is currently affected by the economic and financial crisis, that is, a discretionary fiscal policy. Nondiscretionary fiscal policy is at work everyday as a result of policies enacted years ago. Efficiency wages are wage payments necessary to compensate workers for unpleasant or risky work conditions. Discretionary fiscal policy is a change in government spending or taxes. Discretionary fiscal policy refers to: A. any change in government spending or taxes that destabilizes the economy. 17. The standardized budget refers to the inflationary impact that the automatic stabilizers have in a full-employment economy. B)the money supply. B. is aimed at achieving greater price stability. A.An equilibrium is a collection of str... SWOT for Coca-Cola: Expansionary policy is used more often than its opposite, contractionary fiscal policy. Automatic stabilizers will _____ the _____ effect of the _____ in aggregate demand. 169.Government tax revenue rises and falls with the business cycle as: A)the multiplier effect of taxes and government transfers. The standardized budget tells us what the size of the federal budget deficit or surplus would be if the economy was at full employment. B. In the United States, discretionary spending refers to optional spending set by appropriation levels each year, at the discretion of Congress. Fiscal measures are frequently used in tandem with monetary policy to achieve certain goals. 163.Congress increases personal income tax rates to balance the budget. D. The standardized budget refers to the size of the federal government’s budgetary surplus or deficit when the economy is operating at full employment. Kindly login to access the content at no cost. B. B. consumption equals aggregate expenditures. A. multiplier B. wealth C. interest-rate D. Keynes 6. Posted on December 2, 2020 by December 2, 2020 by Monetary policy is a demand-side policy that is used to control the money supply and interest rates to influence aggregate demand. Discretionary fiscal policy refers to changes in taxes and government expenditures made by Congress to stabilize the economy. Voters like both tax cuts and more benefits, and as a result, politicians that use expansionary policy tend to be more likable. A lump-sum tax means that tax revenues vary directly with GDP. B. The importance of developing forecasts of the business environment. ScholarOn, 10685-B Hazelhurst Dr. # 25977, Houston, TX 77043,USA. All Rights Reserved. D. The standardized budget tells us that tax revenues should vary inversely with GDP. Automatic stabilizers are government spending and taxation changes that cause fiscal policy to be _____ when the economy contracts. C. a reduction in interest rates. C. Discretionary fiscal policy refers to the authority that the President has to change personal income tax rates. 10. This statement describes the _______ effect. The standardized budget refers to the number of workers who are underemployed when the level of unemployment is 4 to 5 percent. D. A lump-sum tax means that tax revenues vary inversely with GDP. B. budget deficit. Discretionary fiscal policy measures enacted during the ... Chapter 13 - ECO 1002 Intro To Macro - Villanova - StuDocu. D)taxes to account for externalities and control pollution. Question B. Expansionary fiscal policy is so named because it A. necessarily expands the size of government. Expansionary fiscal policy occurs when the Congress acts to cut tax rates or increase government spending, shifting the aggregate demand curve to the right. ? Discretionary fiscal policy refers to any change in government spending or taxes that destabilizes the economy. Government tax revenue rises and falls with the business cycle as: the multiplier effect of taxes and government transfers. These changes occur on a year by year basis and are used to reflect the current economic status. A)interest rates. If the price level increases in the United States relative to foreign countries, then American consumers will purchase more foreign goods and fewer U.S. goods. United States discretionary spending. Fiscal Policy Discretionary fiscal policy refers to the federal government's management of government spending and taxes. 165.The automatic stabilizer in government tax revenue that occurs when GDP rises _____ the multiplier. B. the authority that the president has to change personal income tax rates. On the other hand, discretionary fiscal policy is an active fiscal policy that uses expansionary or contractionary measures to speed the economy up or slow the economy down. D. a tax rate increase. When the economy expands, income tax receipts will: rise, but sales tax revenues will remain the same. A lump-sum tax means that the tax applies only to one time period. Please answer the three questions above and label them clearly. C. 20 percent. Fiscal policy can be either expansionary or contractionary. Fiscal policy refers to the use of government spending and tax policies to influence economic conditions. Fiscal policies that require no government action but that are expansionary when the economy contracts and contractionary when the economy expands are known as: Because the revenue from personal income taxes increases as disposable income increases: the marginal propensity to consume decreases as income increases. ? Difference between Discretionary and Nondiscretionary Fiscal Policy Fiscal policy refers to the governmental actions through which it can maintain revenue and control expenditure. If you need to exit before completing the exam, click Cancel Exam. stay the same unless the government changes the tax rates. C)government : 2032664. Discretionary fiscal policy refers to: intentional changes in taxes and government expenditures made by Congress to stabilize the economy. B. the authority that the president has to change personal income tax rates. Kindly login to access the content at no cost. Discretionary fiscal policy refers to: ? Efficiency wages are usually less than market wages. ... What can managers garner from the numerous Contingency Theories of Effective Leadership? D. Efficiency wages are relevant to macroeconomics because they explain rightward shifts in aggregate demand. Fiscal policy refers to the manipulation of government spending and taxes to achieve greater equality in the distribution of income. An appropriate fiscal policy for severe demand-pull inflation is A. depreciation of the dollar. 161.Discretionary fiscal policy refers to changes in: C)government spending or taxes to close a recessionary or inflationary gap. ? Discretionary fiscal policy is the term used to describe actions made by the government. The fact that tax receipts fall during a recession: reduces the adverse effect of the initial fall in aggregate demand. The amount by which federal tax revenues exceed federal government expenditures during a particular year is the A. budget surplus. B. B. price level. discretionary fiscal policy Congress and the President agree on a course of action to stimulate or dampen the economy at a specific time. 5. Discretionary Fiscal Policy Definition. C. The interest-rate effect suggests that an increase in the price level will increase the demand for money, increase interest rates, and decrease consumption and investment spending. 3. C)government, 161.Discretionary fiscal policy refers to changes in: d. government spending at the discretion of the president and the Congress. D. public debt. Fiscal policy, measures employed by governments to stabilize the economy, specifically by manipulating the levels and allocations of taxes and government expenditures. c. elements of fiscal policy that automatically change in value as national income changes. the marginal propensity to save increases as income decreases. Discretionary fiscal policy refers to government policy that alters government spending or taxes. Mark all the FALSE statements A. C. Fiscal policy refers to the manipulation of government spending and taxes to stabilize domestic output, employment, and the price level. The most important determinant of consumption and saving is the A. interest rate. Contractionary Fiscal Policy . 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