Question

Econ HW, please help!

UTION # FISCAL POLICY NAME the mix of government spending and taxing in order to balance the Fiscal policy is best defined as: uncontrolled government spending, altering the mix of govern budget every fiscal year. changes in govern macroeconomic goals. vernment spending and taxing for the purpose of achieving certain minimizing government expenditures over the fiscal year. , while reases in government spending and lower taxes represent decreases in government spending and higher taxe contractionary fiscal policy, expansionary fiscal policy contractionary monetary policy, expansionary monetary policy expansionary fiscal policy; contractionary fiscal policy expansionary monetary policy; contractionary monetary policy Changes in government spending and taxing that counteract the business cycle and occur as a result of changing economic conditions are: discretionary stabilizers. automatic (built-in) stabilizers. discretionary budget balancers. automatic (built-in) budget balancers. The increase in personal income tax payments that occurs when an economic expansion causes incomes to rise is an example of: discretionary, expansionary fiscal policy. discretionary, contractionary fiscal policy. automatic, expansionary fiscal policy. automatic, contractionary fiscal policy. Suppose Congress believes that the economy is entering a recession and approves a budget that includes increased overall government spending with no corresponding Increase in taxes in order to stimulate aggregate demand. This is an example of: a. discretionary, expansionary fiscal policy discretionary, contractionary fiscal policy automatic, expansionary fiscal policy. automatic, contractionary fiscal policy events could cause a reces use the economy is initially at full-employment equilibrium. Which of the following could cause a recessionary gap, ceteris paribus? hent increases as a result of optimistic business expectations households save less at every level of disposable income sumers spend less due to declining consumer confidence in the economy Congress decreases personal income tax rates Chapter 9 Assignments 177

Answer 1

1)

Answer: (C)

Change in the expenditure and tax of government is called fiscal policy.

2)

Answer: ( C)

increase in government expenditure and reducing taxes is called expansionary fiscal policy while on other side, when government reduces its expenditure and increases taxes , it goes by the name of contractionary fiscal policy.

3)

Answer: (B)

Automatic stabilizers do not need any government active intervention. These automatically stabilize the economic activities.

4)

Answer: (D)

such policy reduces the aggregate demand during the boom period.

5)

Answer: (A)

Since here government actively changing its policies to address the issue of deficient demand. it is discretionary action of government.

6)

Answer: (C)

The fall in the aggregate demand owing to the decline in consumer confidence would cause the recessionary gap.