Which of the following is NOT an undesirable side-effect of discretionary fiscal policy? A) Tax changes may change expectations. B) Raising taxes raises prices. C) Tax changes could have disincentive effects. D) Cuts in spending may harm the poor.

Which of the following is NOT an undesirable side-effect of discretionary fiscal policy? A) Tax changes may change expectations. B) Raising taxes raises prices. C) Tax changes could have disincentive effects. D) Cuts in spending may harm the poor.

MACROECONOMICS FOR TODAY

10th Edition

ISBN:9781337613057

Author:Tucker

Publisher:Tucker

Chapter11: Fiscal Policy

Section: Chapter Questions

Problem 8SQP

See similar textbooks

Related questions

Q: How will the deficit for the bottom line budget of $3.1 trillion affect the economy?

A: The budget deficit would result in the increase of the government expenditures over the revenues.…

Q: Which of the following illustrates the effectiveness lag? A.Policymakers implement contractionary…

A: Effectiveness lag can be understood as when the policy is implemented or any change in policy is…

Q: If the objective of fiscal policy is to stabilize (achieve full-employment (potential) GDP and…

A: A balanced budget is a circumstance in monetary planning or the budgeting technique where total…

Q: Which of the following is NOT a discretionary fiscal policy A. Making automatic stabilizers more…

A: Fiscal policy refers to the impact on the economy that is produced by governmental spending and…

Q: 1) Under which of the following scenarios would an expansionary fiscal policy be more effective?…

A: In an economy, expansionary fiscal policy refers to the situation when government tries to increase…

Q: how discretionary fiscal policy fights recession and inflation

A: The fiscal policy of the government used as per the need of the government is discretionary fiscal…

Q: fiscal policy

A: There are two policies which go hand in hand to regulate or stimulate the economy. The monetary…

Q: Will a discretionary fiscal policy action that involves spending $100 billion have the same overall…

A: The discretionary fiscal policy refers to changes in the tax rate or the level of government…

Q: a) How can the government use fiscal policy during a downturn to stimulate the economy?

A: Fiscal policy is the use of government tax collection and expenditure to impact the economy of a…

Q: The PAYGO budget requirement means: a. that only programs generating revenues may be proposed for…

A: A government's budget records the revenue and spending anticipated by the government in the coming…

Q: Describe the shortcomings of Fiscal Policy. Be as thorough as possible.

A: Fiscal policy is the one where government changes its spending and tax policies in order to achieve…

Q: Discuss two reasons why discretionary fiscal policy (expansionary & contractionary) may be…

A: Contractionary fiscal policy:- When the government either slashes expenditure or hikes taxes, it is…

Q: Currently many forecasters are predicting a recession for this year. What type of fiscal should the…

A: In order to affect economic conditions, particularly to stabilize economic volatility and foster…

Q: One purpose of discretionary fiscal policy is to Multiple Choice O increase government spending…

A: An economy's overall health can be influenced by a government's tax, spending, and borrowing…

Q: Which of the following is NOT an automatic stabilizer? a. income taxes b. unemployment insurance c.…

A: A nation's economic fluctuations can be offset by automatic stabilizers through fiscal policy. The…

Q: Which of the following is NOT a component of federal fiscal policy? A. Federal tax revenues…

A: The fiscal policy plays an important role in stabilizing an economy. By synchronized with monetary…

Q: During an economic _______, there is a decline in economic activity, including falling GDP, rising…

A: Economic cycles consist of various stages, including expansion, downturn or recession and…

Q: In order to boost the economy, the government should implement expansionary fiscal policy by…

A: Fiscal policy is the tool used by government to achieve the objectives of economy such as economic…

Q: During difficult economic times, why are uniform across-the-board budget cuts poor fiscal policy?

A: Difficult economic times refer to periods of economic downturn, characterized by a significant…

Q: Fiscal policy consists of O O A) Money supply and interest rates. B) Taxes and government spending.…

A: Fiscal policy is a government's use of spending and taxation to influence the economy. It includes…

Q: Should the government fight recessions with spending hikes rather than tax cuts ? Explain

A: Government spending and tax reductions have different multiplying effects on the economy.

Q: Giving examples, outline the reasons for using a discretionary fiscal policy

A: Fiscal policy: It refers to a policy that is used by the government. It is a policy used to tackle…

Q: discuss the budget cycle.discuss why the annual budget is considered as a political act of state?

A: Budget is a financial plan for a specified future period of time. The budget presents an estimation…

Q: Calculate the value of total expenditure when the budgetary deficit is given to be as $12,000…

A: we know that the difference between the total expenditure and the total receives always give us the…

Q: Evaluate the effectiveness of fiscal policy as a tool to reduce unemployment.

A: Fiscal policy is a policy used by the government in which it influences the level of government…

Q: Define fiscal policy and explain the role of income taxes and government spending as fiscal policy…

A: Meaning of Fiscal Policy: The term fiscal policy refers to the situation under which the…

Q: In which of the following instances will the effect on equilibrium price be dependent on the…

A: The demand curve is the downward-sloping curve. The supply curve is the upward-sloping curve. The…

Q: When the Federal government takes action to change taxes and spending to stimulate the economy such…

A: Federal government can increase or decrease taxes and government spending to change the money supply…

Q: For the U.S. government, which of the given is NOT an example of discretionary spending? defense…

A: Answer is Medicare. Medicare spending is not an example of discretionary spending and it does not…

Q: Gokhale and Smetters (2003) found that the long-run fiscal imbalance in the U.S. government budget…

A: Gokhale and smettersbth economist of America researched on fiscal imbalance of America.In 2003,they…

Q: Which of the following is an example of discretionary fiscal policy? A(n) Group of answer choices…

A: Discretionary fiscal policy is used by the government to change aggregate demand in an economy,…

Question

Which of the following is NOT an undesirable side-effect of discretionary fiscal policy?

A) Tax changes may change expectations.

B) Raising taxes raises prices.

C) Tax changes could have disincentive effects.

D) Cuts in spending may harm the poor.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

For the U.S. government, which of the given is NOT an example of discretionary spending? defense spending science spending Medicaid Medicare For the U.S. government, which of the given is NOT an example of mandatory spending? Medicare education spending Social Security interest on the national debt Which type of spending currently takes up a larger proportion of the U.S. federal budget? Mandatory spending and discretionary spending take up an equal amount. mandatory spending discretionary spending
Calculate the value of total expenditure when the budgetary deficit is given to be as $12,000 million and at the same time the total receipts are given to be as 88,000 million.
When the Federal government takes action to change taxes and spending to stimulate the economy such policy is: A) Discretionary B) Passive C) Automatic D) Nondiscretionary
How will the deficit for the bottom line budget of $3.1 trillion affect the economy?
During difficult economic times, why are uniform across-the-board budget cuts poor fiscal policy?
Which of the following is considered contractionary fiscal policy? A) Congress decreases the income tax rate. B) Congress decreases defense spending. C) Legislation removes a college tuition deduction from federal income taxes. D) The New Jersey legislature cuts highway spending to balance its budget.
The PAYGO budget requirement means: a. that only programs generating revenues may be proposed for addition to the executive budget. b. that legislation that would increase entitlement spending must be accompanied with an increase in revenue or reduction in spending sufficient to cover the new entitlement spending. c. that debt refinancing must be approved by Congress. d. that no tax reductions are permitted.
Will a discretionary fiscal policy action that involves spending $100 billion have the same overall effect on the economy in the short run as a $100 billion tax cut?
discuss the budget cycle.discuss why the annual budget is considered as a political act of state?
Which of the following illustrates the effectiveness lag? A.Policymakers implement contractionary fiscal policy but it will be a few months before it starts working. B.Policymakers believe an economic downturn has occurred, but they decide not to take action until they are sure. C.Policymakers first learn of the recession when it is five months old. D.Policymakers agree to increase taxes, but it will be at least two months before the policy is implemented.
1) Under which of the following scenarios would an expansionary fiscal policy be more effective? Group of answer choices a) Households consume more and MPC is higher. b) Households consume less and MPC is lower. c) Interest rate increases. d) Households save more to prepare for tax increases in the future. e) The government makes it more difficult for households to borrow.
Which of the following is an example of discretionary fiscal policy? A(n) Group of answer choices increase in Social Security entitlements provided by the federal government. increase in the money supply. decrease in interest rates. decrease in lump-sum taxes.