| 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:
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| do not affect | ||
|
| lower | ||
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| 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 | ||
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| August 1 to July 31 | ||
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| September 1 to August 31 | ||
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| 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 | ||
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| 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 | ||
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| 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:
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| 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 | ||
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| monetary policy instrument | ||
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| operational instrument | ||
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| 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 | ||
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| output gap | ||
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| 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:
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| net taxes | ||
|
| tax wedge | ||
|
| induced tax | ||
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| 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:
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| financial stability | ||
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| 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 | ||
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| 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 | ||
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| corporate income taxes | ||
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| 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 | ||
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| 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:
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| expenditure on goods and services | ||
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| transfer payments | ||
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| debt interest | ||
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| indirect taxes | ||
| Question 19 | 5 / 5 points | ||
Who first submits a budget proposal in February?
Question options:
|
| Congress | ||
|
| the House of Representative Budget Committee | ||
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| the Senate Budget Committee | ||
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| 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 |
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| a balanced budget |
|
| the national debt
|
