Question 1 5 / 5 points Income taxes create a difference between the interest rate paid by companies

Question 1 5 / 5 points

Income taxes create a difference between the interest rate paid by companies and received by lenders. These taxes __________ saving, investment, and the growth rate of real GDP.

Question options:

do not affect

lower

encourage, but may not change

increase

Question 2 5 / 5 points

The U.S. fiscal year runs from __________.

Question options:

July 1 to June 30

August 1 to July 31

September 1 to August 31

October 1 to September 30

Question 3 5 / 5 points

Being a side effect of fiscal policy on the supply side, the provision of public goods and services __________ productivity and potential GDP.

Question options:

does not affect

decreases

increases

can hinder or stimulate

Question 4 5 / 5 points

What type of stabilizing fiscal policy is an increase in the health care budget for citizens without coverage?

Question options:

automatic fiscal policy

discretionary fiscal policy

contractionary fiscal policy

long run fiscal policy

Question 5 5 / 5 points

According to the government expenditure multiplier, when government expenditure increases, aggregate demand increases. Other things remaining the same, what happens to the real GDP?

Question options:

real GDP remains stable

real GDP increases

real GDP decreases

real GDP induces a decrease in consumption expenditure

Question 6 5 / 5 points

A government budget deficit __________ the real interest rate and “crowds out” some private investment, which slows real GDP growth.

Question options:

distorts

decreases

increases

does not affect

Question 7 5 / 5 points

A variable that the Fed can directly control or closely target, and which influences the economy in desirable ways, is known as a(n. __________.

Question options:

fiscal policy instrument

monetary policy instrument

operational instrument

economic instrument

Question 8 5 / 5 points

The percentage deviation of real gross domestic product (GDP. from potential GDP is __________.

Question options:

marginal GDP

input gap

output gap

deadweight loss

Question 9 5 / 5 points

If real GDP is greater than potential GDP with inflation being a problem, the Fed will __________ the federal funds rate using a(n. __________.

Question options:

lower; open market sale

raise; closed market sale

raise; open market sale

lower; closed market sale

Question 10 5 / 5 points

What type of stabilizing fiscal policies arise because tax revenues and outlays fluctuate with the real GDP?

Question options:

automatic fiscal policies

discretionary fiscal policies

contractionary fiscal policies

long run fiscal policies

Question 11 5 / 5 points

Income taxes create a difference between the wage rate paid by companies and received by workers. These taxes __________ both employment and potential GDP.

Question options:

do not affect

lower

encourage, but may not change

increase

Question 12 5 / 5 points

What is the gap created by a tax between what a buyer pays and what a seller receives or between the before-tax and after-tax wage rates?

Question options:

net taxes

tax wedge

induced tax

expenditure tax

Question 13 0 / 5 points

A situation in which financial markets and institutions function normally to allocate capital resources and risk is __________.

Question options:

financial stability

financial instability

fiscal stability

fiscal instability

Question 14 5 / 5 points

A __________ gap leads to inflation and a __________ gap leads to unemployment.

Question options:

negative; positive

positive; negative

negative; near zero

near zero; positive

Question 15 5 / 5 points

If real GDP is below potential GDP, the government might decrease its expenditure on goods and service, decrease transfer payments, raise taxes, or do some combination of all three. This is called a(n. __________.

Question options:

automatic fiscal policy

discretionary fiscal policy

contractionary fiscal policy

fiscal stimulus

Question 16 5 / 5 points

What is the largest source of revenue for the federal government?

Question options:

personal income taxes

social security taxes

corporate income taxes

indirect taxes

Question 17 5 / 5 points

In the long run, an increase in the supply of bank loans is matched by a __________ in the price level and the quantity of real loans is __________.

Question options:

rise; unchanged

rise; increased

fall; unchanged

fall; decrease

Question 18 5 / 5 points

On the outlays side of the budget, how are Social Security benefits, Medicare and Medicaid benefits, unemployment benefits, and other cash benefits to individuals and businesses labeled?

Question options:

expenditure on goods and services

transfer payments

debt interest

indirect taxes

Question 19 5 / 5 points

Who first submits a budget proposal in February?

Question options:

Congress

the House of Representative Budget Committee

the Senate Budget Committee

the President

Question 20 5 / 5 points

If tax revenues equal outlays on the federal budget, what does the government have?

Question options:

a budget surplus

a budget deficit

a balanced budget

the national debt

 

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