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 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter30: Government Budgets And Fiscal Policy

Section: Chapter Questions

Problem 30RQ: Under what general macroeconomic circumstances might a government use expansionary fiscal policy?...

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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.
Which of the following is an example of a contractionary fiscal policy? O a. The Bangko Sentral ng Pilipinas increased money supply to respond to inflation. O b. The government increased its budget allocation for infrastructure spending. O c. A new law including reforms such as a decrease in income tax and excise tax was promulgated. O d. None of the above
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.
Quèstion 14 Which of the following fiscal policy changes would be the most contractionary? O A. a $10 billion increase in taxes and a $30 billion cut in government spending. O B. a $40 billion increase in taxes. O C, a $30 billion increase in taxes and a $10 billion cut in government spending. Opa $20 billion increase in taxes and a $20 billion cut in government spending.
Which of the following is carried out in an expansionary fiscal policy? O a. Higher taxes and lower government expenditure O b. Lower taxes and higher government expenditure O c. Higher taxes and higher government expenditure O d. Lower taxes and lower government expenditure.
Assume the government makes no fiscal policy changes when the economy experiences a downturn. Which outcome would be expected? O Government expenditure to be higher and tax revenues to be lower, probably leading to a budget deficit. Government expenditure to be lower and tax revenues to be lower, probably leading to a budget surplus. O Government expenditure to be higher and tax revenues to remain the same, probably leading to a budget deficit. Government expenditure to be higher and tax revenues to be lower, probably leading to a budget surplus. O Government expenditure to remain the same and tax revenues to be lower, probably leading to a budget deficit.

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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.