6. Automatic stabilizers Which of the following are examples of automatic stabilizers? Check all that apply. As unemployment falls during an expansion, unemployment insurance payments decline. As people earn higher incomes during an expansion, the progressive tax system requires them to pay higher average tax rates. In 2001, partly in response to a recession, Congress enacted lower income tax rates and increased tax exemptions for married couples. In 1968, Congress enacted a temporary 10% increase in personal income tax rates in response to an inflationary GDP gap.

6. Automatic stabilizers Which of the following are examples of automatic stabilizers? Check all that apply. As unemployment falls during an expansion, unemployment insurance payments decline. As people earn higher incomes during an expansion, the progressive tax system requires them to pay higher average tax rates. In 2001, partly in response to a recession, Congress enacted lower income tax rates and increased tax exemptions for married couples. In 1968, Congress enacted a temporary 10% increase in personal income tax rates in response to an inflationary GDP gap.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Title Actions by the Federal Government that decrease the progressivity of the tax system: a. decrease th Description Actions by the Federal Government that decrease the progressivity of the tax system: a. decrease the amount of government spending b. increase the effects of automatic stabilizers c. decrease the effects of automatic stabilizers d. increase the amount of taxation
One criticism of the fiscal policy ineffectiveness is because: A.the velocity of money is predictable. B.it is dependent on Congress' approval. C.the crowding-out effect increases investment. D.prices and wages are sticky in the short run.
1. Why is a $100 billion increase in government spending on goods and services more expansionary than a $100 billion decrease in taxes?
1. Which of the following is an example of an automatic stabilizer? The savings Unemployment benefits Autonomous public expenditure The multiplier effect
3. What is fiscal equalization? Give an example
Automatic stabilizers cause government revenues to during a recession and cause government expenditures to during a recession. (Choose the answer that fills in the two blanks) a. Increase; decrease b. Increase; increase C. Decrease; decrease d. Decrease; increase e. Not change; not change
Always use economic terms, diagrams. "Counter-cyclical fiscal policy works. If consumers and businesses lose confidence because of the changing world, the government can fix this economic problem - that is what the Biden $1.9 trillion stimulus was all about. Sure, there might be some issues with the deficit, but given a recovery, the government can pay that deficit off. Also, since we are in a very inflationary period again we might expect counter-cyclical fiscal policy to resolve some of the debt issues." Please explain this comment. (Hint: don't forget to use an AS AD diagram and possibly a business cycle diagram).
Automatic stabilizers are increases in spending and reductions in taxes that__ ?which one? a.Are enacted by Congress when the economy enters in a recession b.Are the result of existing tax and revenue spending rules c.Are required by the Department of Treasury as needed d.Are enacted by the President when the economy enters in a recession
Some politicians have suggested that the United States enact a constitutional amendment requiring that the Federal government balance its budget annually. Such an amendment, f strictly enforced, would force the government to enact a contractionary fiscal policy whenever the economy experienced a severe recession. This is because when the economy enters a recession, 0000 net tax revenue falls and transfer payments rise. Balancing the budget would require raising transfer payments and raising taxes. net tax revenue rises and transfer payments fall. Balancing the budget would require raising transfer payments and lowering taxes. net tax revenue falls and transfer payments rise. Balancing the budget would require lowering transfer payments and raising taxes net tax revenue rises and transfer payments fall. Balancing the budget would require lowering transfer payments and lowering taxes
please answer the following question: 1. As the economy declines into recession, the collection of personal income tax revenuesautomatically falls. This relationship best describes how the progressive income tax system:A. serves as a discretionary fiscal policyB. have no effect in the economyC. will help discourage spendingD. converts a recession into a depressionE. serves as an automatic stabilizer for the economy
4) What are direct expenditure offsets and how do they influence the effects of fiscal policy?
An increase in the tax rates as a result of a new tax law passed by Congress is an example of ________. a. discretionary fiscal policy b. increasing the government debt c. increasing the government deficit d. needs-tested taxing change.