Fiscal policy under the 2009 American Recovery and Reinvestment Act took the form of:Select one:O a. government spending alone.O b. a mix of government spending and tax cuts.O c. tax cuts alone.O d. neither government spending nor tax cuts.

The 2009 American Recovery and Reinvestment Act (ARRA) represented a monumental effort by the U.S.…

Answered: Fiscal policy under the 2009 American…

Principles of Economics (MindTap Course List)

8th Edition

ISBN:9781305585126

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter36: Six Debates Over Macroeconomic Policy

Section: Chapter Questions

Problem 6PA

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Under what general macroeconomic circumstances might a government use expansionary fiscal policy? When might it use contractionary fiscal policy?
What would happen if expansionary fiscal policy was implemented in a recession but, due to lag, did not actually take effect until after the economy was back to potential GDP?
Assume that the economy is in a recession and the government is experiencing a budget deficit. What happens if balanced-budget fiscal policy is used to eliminate the deficit? O a. Unemployment will fall. O b. GDP will rise. O c. The deficit could be eliminated if GDP rose. d. Government spending will fall. P NTR will remain unchanged.
If the government were to try to offset surplus years with deficit years over the business cycle, this would result in O A. a reduction in investment capital. O B. a higher debt-to-GDP ratio. OC. an annually balanced budget. O D. a structurally balanced budget. O E. a cyclically balanced budget.
All of the following are part of fiscal policy EXCEPT Select one: O a. setting tax rates. O b. setting government spending. O c. controlling the money supply. The formula for aggregate expenditure is
Which of the following will affect our debt-to-GDP ratio? O a. Government expenditures O b. GDP growth rates Interest rate changes O d. All of the answers are correct
Refer to the figure at right. Government policy that moved the economy from A to B would be accomplished by O A. an expansionary fiscal policy combined with a contractionary monetary policy. O B. OC. a contractionary fiscal policy combined with an expansionary monetary policy. a contractionary policy that would reduce the rate of inflation and would cause workers to remain unemployed longer than they were before. O D. raising the minimum wage. Inflation Rate 2.5 A B I 6 D Unemployment Rate
In 2005 national government spending is $4.00 trillion and tax collections are $4.00 trillion. This government, in 2005, experienced a O A. budget deficit, O B. balanced budget. O C. budget surplus. O D. None of the above.
Suppose real GDP is constant. If the government's fiscal policy objective is to reduce the outstanding public debt, the government must: Have a structural primary budget surplus that is larger than its interest payments on the public debt O b. None of the answers is correct Oc Have a structural budget surplus equal to the outstanding public debt O d. Sell new bonds in the open market
Contractionary fiscal policies do not necessarily decrease a country's debt-to-GDP ratio because O a. It decreases our GDP and our ability to pay the debt O b. It will appreciate our currency It increases the interest rates on outstanding debt O d. All of the answers are correct
1.6
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Fiscal policy under the 2009 American Recovery and Reinvestment Act took the form of: Select one: O a. government spending alone. O b. a mix of government spending and tax cuts. O c. tax cuts alone. O d. neither government spending nor tax cuts.