7) Which of the following is considered expansionary fiscal policy? a) Congress decreases the income tax rate b) Congress increases defense spending c) legislation increasing a college tuition deduction from federal income taxes d) the New Jersey legislature cuts highway spending to balance its budget
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- What would happen if contractionary fiscal policy were implemented during an economic boom but, due to Lag, it did not take effect until the economy slipped into recession?Do you agree or disagree with this statement: It is in the best interest of our economy for Congress and the President to run a balanced budget each year. Explain your answer.4) Why should the federal government not be required to balance its budget while state and local governments are?
- 10) Fiscal policy is defined as changes in federal ________ and ________ to achieve macroeconomic objectives such as price stability, high rates of economic growth, and high employment. A) taxes; interest rates B) taxes; expenditures C) interest rates; money supply D) taxes; money supply3********************* 3)List the five most powerful changes to fiscal policy that you would propose for the United States that you would like to see implemented that would reduce our debt-to-GDP ratio and put the country on a fiscally sustainable path to the future.a) How can the government use fiscal policy during a downturn to stimulate the economy?
- 2) Transfer payments are the ________ in the government's budget. A) smallest expenditure source B) largest expenditure source C) smallest revenue source D) largest revenue source 3) Personal taxes are the ________ in the government's budget. A) smallest expenditure source B) largest expenditure source C) smallest revenue source D) largest revenue source 4) A government's debt is increased when it A) balances is budget. B) buys more bonds. C) runs a deficit. D) runs a surplus. 5) When a government runs a surplus A) its debt increases. B) it must raise taxes. C) its debt decreases. D) it must cut spending. 6) The amount the government owes to the public is the federal debt. 7) If tax receipts are greater than government expenditures the government is running a surplus. 8) If the government runs a surplus, then the government debt increases. 9) Transfer payments are the largest part of the U.S.…Part A Decide whether each of the following fiscal policies of the federal government is expansionary or contractionary. Write expansionary or contractionary, and explain the reasons for your choice. 1. The government cuts business and personal income taxes and increases its own spending. Expansionary. The decrease in personal income taxes increases disposable income and thus increases consumption spending. The business tax cut increases investment spending, and the increase in government spending increases government demand. 2. The government increases the personal income tax , Social Security tax and corporate income tax Government spending stays the same 3. Government spending goes up while taxes remain the same. 4. The government reduces the wages of its employees while raising taxes on consumers and businesses Other government spending remains the same16) Contractionary fiscal policy, other things being equal, will tend to: A) increase transfer payments B) increase government purchases C) increase consumption taxes D) increase interest rates
- Which of these is MOST LIKELY to occur after the government increases taxes? A.) Consumer spending decreases B.) Annual deficits increase. C.) Government programs decrease D.)The national debt increasesWhich of the following statements about the Canadian federal budget is FALSE? A. Currently, Canada has a federal budget deficit. B. The Minister of Finance presents the federal bugdet to the Canadian Parliament. C. The largest source of federal government revenues are personal income taxes. D. The largest source of federal government outlays are transfer payments to persons and other levels of government. E. Canada has not had federal budgetary surpluses in any fiscal year over the 2000 to 2020 period.i) Calculate total government expenditures. ii)Calculate total government spending. iii)Is the government running a surplus, deficit, or a balanced budget?