Economics For Today
10th Edition
ISBN: 9781337613040
Author: Tucker
Publisher: Cengage Learning
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Question
Chapter 21, Problem 11SQ
To determine
The reason why the automatic stabilizers lean against the prevailing wind of business cycles.
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Students have asked these similar questions
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.
Fiscal policy consists of the executive branch's decisions to tax and spend. If the economy is in an expansionary mode just coming out of a recession, in regards to aggregate demand and aggregate supply, we can assume that a tax hike will lead to
a.
aggregate supply to shift inward.
b.
the economy expanding even more as a result.
c.
aggregate demand to shift inward.
d.
no changes will occur.
e.
aggregate demand and supply to shift inward.
7. Non-discretionary fiscal policy designed to counteract a reduction in aggregate demand might
include
A. an increase in the money stock.
B. a return to the gold standard.
C. increased government spending on unemployment benefits.
D. all of the options are correct.
Chapter 21 Solutions
Economics For Today
Ch. 21.3 - Prob. 1YTECh. 21 - Prob. 1SQPCh. 21 - Prob. 2SQPCh. 21 - Prob. 3SQPCh. 21 - Prob. 4SQPCh. 21 - Prob. 5SQPCh. 21 - Prob. 6SQPCh. 21 - Prob. 7SQPCh. 21 - Prob. 8SQPCh. 21 - Prob. 9SQP
Ch. 21 - Prob. 10SQPCh. 21 - Prob. 11SQPCh. 21 - Prob. 1SQCh. 21 - Prob. 2SQCh. 21 - Prob. 3SQCh. 21 - Prob. 4SQCh. 21 - Prob. 5SQCh. 21 - Prob. 6SQCh. 21 - Mathematically, the value of the tax multiplier in...Ch. 21 - Prob. 8SQCh. 21 - Prob. 9SQCh. 21 - Prob. 10SQCh. 21 - Prob. 11SQCh. 21 - Prob. 12SQCh. 21 - Prob. 13SQCh. 21 - Prob. 14SQCh. 21 - Prob. 15SQCh. 21 - Prob. 16SQCh. 21 - Prob. 17SQCh. 21 - Prob. 18SQCh. 21 - Prob. 19SQCh. 21 - Prob. 20SQ
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Similar questions
- Is expansionary fiscal policy more attractive to politicians who believe in larger government or to politicians who believe in smaller government? Explain your answer.arrow_forwardIf Canada's economy moves into an expansionary phase of the business cycle, then: Group of answer choices A. government spending and tax revenue will increase because of automatic stabilizers. B.government spending and tax revenue will decrease because of automatic stabilizers. C.automatic stabilizers will decrease government spending and increase tax revenue. D.automatic stabilizers will increase government spending and decrease tax revenue.arrow_forwardWhich of these are examples of automatic stabilizers? A. sales tax revenues and income security B. sales tax rates and income security C. sales tax rates and transfer payments D. income tax revenues and transfer payments Option C is WRONG, hoping to get the correct answer with an explanation.arrow_forward
- Fiscal stance refers to: Select one: A. A government that takes a tough stance when it comes to running the country’s finances B. A government that is running a budget deficit C. A government that is running a budget surplus D. Whether a government is pursuing an expansionary or contractionary fiscal policyarrow_forwardWhich of the following is not an automatic stabilizer? A. Unemployment compensation. B. Defense spending. C. Progressive income tax rates (that is, higher marginal tax rates that rise with income). D. All of the answers are automatic stabilizersarrow_forwardTitle 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 taxationarrow_forward
- 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.arrow_forwardPlease answer the following questions:arrow_forwardWhich of the following is an example of contractionary fiscal policy?A. Cutting spendingB. Reducing taxesC. Increasing spendingD. None of thesearrow_forward
- Which of these is MOST LIKELY to occur after the government increases taxes? A.) Consumer spending decreases B.) Annual deficits increase. C.) Government programs decrease D.)The national debt increasesarrow_forwardpick one is (are) an example of an automatic stabilizer. A. A state income tax B.Property taxes C.A minimum hourly wage law D. Unemployment assistance E. Federal student loan programsarrow_forwardA federal budget deficit is financed by: a. Printing money b. Selling Treasury bonds c. Raising taxes d. Cutting spending Eighty percent of the federal budget: a. Is available for discretionary spending b. Is already funded from decisions made in previous years c. Is devoted to military spending d. Is devoted to health care spending An example of an automatic stabilizer is: a. Military spending b. Social security payments c. Unemployment compensation d. A decision to spend more on highway construction The cyclical deficit: a. Increases with economic growth b. Increases during the peak of a business cycle c. Decreases with faster economic growth d. Decreases during the trough of the business cycle President Obama wants the government to spend a considerable amount of funds on education; healthcare and infrastructure. This spending will lead to which type of deficit? a. Cyclical b. Natural c. Full employment d. Structural A federal budget…arrow_forward
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