Question

(11)
The amount by which annual government spending exceeds annual government tax revenue is called the deficit. the debt. the dividend. M1.
(12)
Suppose a law was passed to authorize more spending on roads, but several months later the first dollar had not been spent. This delay is an example of a(n) recognition lag. political lag. administration lag. operational lag.
(13)
Which of the following is an example of an unintended effect of fiscal policy? The crowding-out effect Increased aggregate demand Unemployment insurance Reductions in international trade
(14)
The goal of Keynesian fiscal policy during a recession is to do nothing—let the economy recover on its own. move the economic equilibrium back to the full-employment level by increasing aggregate demand. move the economic equilibrium back to the full-employment level by decreasing aggregate supply. reduce long-run aggregate supply so that the economy can reach full employment without a long period of adjustment.
(15)
Imagine that our representatives in Congress have concluded that the economy needs the stimulus of additional government spending, but they have spent several months haggling over what type of spending will be authorized. This is an example of a(n) recognition lag. political lag. administration lag. operational lag.

Answer 1

1) Solution: the deficit.

Explanation: When government outlays exceed government revenues in a particular year, this is called a budget deficit

2) Solution: operational lag

Explanation: operational lag refers to the amount of time it takes operational policies to achieve their intended.

3) Solution: The crowding-out effect

Explanation: The unintended impacts of fiscal policy includes inequitable taxes and crowding out of private sector

4) Solution: move the economic equilibrium back to the full-employment level by increasing aggregate demand

Explanation: According to Keynes, during a recession, overall demand falls because people who are out of work are not spending.

5) Solution: recognition lag

Explanation: Recognition lag refers to the amount of time it takes for monetary or fiscal authorities to recognize a problem in the economy.