Question

Among the most important problems of implementing fiscal policy include all except which of the following?

Correctly timing the desired fiscal stimulus, given the inevitable lags and forecasting errors

Determining how large a stimulus to apply

Assessing when policy actions should be reversed

Determining how long a time lag to apply

If the central bank does not use accommodating monetary policy, a fiscal stimulus is likely to increase interest rates, which in turn, will cause planned investment to decrease. What is this situation called

The multiplier effect

The counter-accommodation effect

The crowding out effect

The time-inconsistency effect

Without an adequate source of domestic saving, a country can invest by borrowing from abroad. In its international accounts, the borrowing will be reflected in a current account _______, balanced by a financial _______.

surplus; outflow

surplus; inflow

deficit; inflow

deficit; outflow

Which of the following statements is true?

Reinvestment of undistributed corporate profits amounts to about 3 percent of U.S. GDP and constitutes the largest single component of government saving.

Reinvestment of undistributed corporate profits amounts to about 15 percent of U.S. GDP and constitutes the largest single component of private saving.

Reinvestment of undistributed corporate profits amounts to about 3 percent of U.S. GDP and constitutes the largest single component of private saving.

Reinvestment of undistributed corporate profits amounts to about 15 percent of U.S. GDP and constitutes the largest single component of government saving.

Which of the following options is correct?

Neither

If investment in infrastructure exceeds depreciation, the country is that much richer at the end of the year.

Both

If depreciation exceeds investment, the country becomes poorer.

Which of the following is a possible source of the funds that a country needs for investment in new capital and replacement of old capital?

An external imbalance in the form of more exports than imports

All of the statements are true.

Household saving

The government budget deficit

Which of the following is an example of fiscal consolidation?

The government is running a budget deficit and chooses to issue new bonds to cover the shortfall in funding.

The government is running a budget deficit and chooses to increase taxes and increase government spending by the same amount.

The authorities choose to reduce government spending and increase taxes by enough to make the deficit sustainable

The government is running a budget deficit and chooses to decrease taxes to stimulate the economy.

Which of the following must be true in the long run for the government budget deficit and debt to be sustainable?

The total budget, including interest payments, must balance on average over the business cycle.

Interest payments on the debt must exceed the rate of creation of new money.

The real value of government debt must grow no faster than real GDP.

Expenditures must be equal to taxes each fiscal year.

Exchange-rate based stabilization focuses on a fixed value for the country’s currency as which of the following?

A means to lower the expected employment level

A way of speeding up velocity

A deflationary shock therapy

A nominal anchor to provide a fixed point of reference for expectatons

A country experiences inflation as a result of a combination of expansionary monetary and fiscal policy, beginning from equilibrium. This inflation would best be called

Supply-side inflation

Monetized inflation

Productivity-driven inflation

Demand-side inflation

A country experiences several years of steady inflation with unemployment below its natural level. Then monetary and fiscal policies are sharply tightened. We expect which of the following to increase as a result?

The rate of inflation

The unemployment rate

Real GDP

The natural level of real output

Which of the following causes of inflation would best be described as a supply shock?

Expansionary monetary policy

Natural disaster

An increase in the government deficit

An investment boom caused by increased export demand

An episode when unemployment and the price level both increase while real output falls below its natural level is called __________

hyperinflation

an inflationary recession

a great depression

demand-side inflation

Answer 1

1) :-c is right option

Fiscal Policy is used by the federal government in efforts to keep the economy stable by increasing or decreasing taxes or government spending.

2) :-c is right option

The Crowding Out Effect is defined as the tendency for increases in government spending to cause offsetting reductions in spending in the private sector

3) :-c is right option

Current Account is defined as a part of the Balance of payments where all exports and imports are recorded

4) :-D is right option

If 4th answer is not d in that case c is right option

According to HOMEWORKLIB RULES we have right to do first four multiple in one time i hope understand