1) Fiscal policy refers to a) making changes in private expenditures as a result of changes in government spending. b) making changes in the quantity of money to achieve particular economic goals. c) efforts to balance a government's budget. d) making changes to government budgets to achieve particular economic goals. 2) The economy suffers a positive supply shock. As a result, in the short run Real GDP will and the price level will a) fall; fall b) fall; rise c) fall; remain constant d) rise; fall 3) A change in Real GDP in the short run can be brought about by a change in a) labor productivity. b) wealth. c) All of the options available d) the exchange rate. 4) An expansionary fiscal policy will a) never result in a budget surplus. b) always result in a budget deficit. c) sometimes result in a budget deficit. d) always result in a budget surplus.
1) Fiscal policy refers to a) making changes in private expenditures as a result of changes in government spending. b) making changes in the quantity of money to achieve particular economic goals. c) efforts to balance a government's budget. d) making changes to government budgets to achieve particular economic goals. 2) The economy suffers a positive supply shock. As a result, in the short run Real GDP will and the price level will a) fall; fall b) fall; rise c) fall; remain constant d) rise; fall 3) A change in Real GDP in the short run can be brought about by a change in a) labor productivity. b) wealth. c) All of the options available d) the exchange rate. 4) An expansionary fiscal policy will a) never result in a budget surplus. b) always result in a budget deficit. c) sometimes result in a budget deficit. d) always result in a budget surplus.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:1) Fiscal policy refers to
a) making changes in private expenditures as a result of changes in government spending.
b) making changes in the quantity of money to achieve particular economic goals.
c) efforts to balance a government's budget.
d) making changes to government budgets to achieve particular economic goals.
2) The economy suffers a positive supply shock. As a result, in the short run Real GDP will
and the price level will
a) fall; fall
b) fall; rise
c) fall; remain constant
d) rise; fall
3) A change in Real GDP in the short run can be brought about by a change in
a) labor productivity.
b) wealth.
c) All of the options available
d) the exchange rate.
4) An expansionary fiscal policy will
a) never result in a budget surplus.
b) always result in a budget deficit.
c) sometimes result in a budget deficit.
d) always result in a budget surplus.
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