Question

1.)

Which of the following is an example of a timing problem with enacting fiscal policy?

	Since most people increasing their savings when their income rises, the tax multiplier is likely to be smaller than originally thought.
	Once the government increases spending, it is difficult to decrease spending in the future
	Democrats want to pass a spending bill, but Republicans do not. They argue for months in the House of Representatives prior to a modified bill being passed.
	the Federal Reserve can neutralize the impact of fiscal policy

2.)

Government outlays consist of

	all governmental purchases resulting from contracts with the private sector and foreign organizations
	government purchases, transfer payments, and interest on the national debt
	government purchases and transfer payments minus the interest on the national debt
	total receipts from all organizations doing business with any level of government

3.)

If tax revenue is $400 billion and outlays are $600 billion, then

Question 7 options:

	there is a budget surplus of $200 billion
	there is a budget surplus of $1000 billion
	there is a budget deficit of $200 billion
	there is a budget deficit of $1000 billion

4.)

The government can safely take on more debt

	as long as the debt involves no interest payments
	if GDP is growing faster than the debt is growing
	if the interest rate is below 3%
	as long as the debt is growing by less than 3% per year

Answer 1

1) timing problem in enacting fiscal policy is the time lag between when problem occurs and when policy implement.it means policy implemented later than when it needed.so option C is right.

2)goverment outlays consists all government payment.so government outlays consists all government purchases , transfer payment and interst payments.so option B is right.

3) budget deficit=government outlays - tax revenue=600-400=200,so there is budget deficit of 200 billion$.option C is right

4)option A can be answer but seems impossible because no debt is given without internet .

So the correct option is b.when gdp grow faster than debt is growing , decrease debt-gdp ratio.