Foundations of Economics (8th Edition)
Foundations of Economics (8th Edition)
8th Edition
ISBN: 9780134486819
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
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Chapter 32, Problem 5MCQ
To determine

Whether needs-tested spending is an automatic or a discretionary fiscal policy.

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In a recession, needs-tested spending ________ and induced taxes ________. increases; increase decreases; increase increases; decrease decreases; decrease increase; do not change   Discretionary fiscal policy is defined as fiscal policy initiated by an act of Congress. left to the discretion of military authorities. with multiplier effects. initiated by a Presidential proclamation. triggered by the state of the economy.   If government expenditure on goods and services increase by $100 billion, then aggregate demand increases by $100 billion. decreases by more than $100 billion. increases by more than $100 billion. increases by less than $100 billion. remains unchanged.   The magnitude of the tax multiplier is ________ the magnitude of the government expenditure multiplier. smaller than greater than exactly one half the inverse of equal to   Suppose the economy is in an equilibrium in which real GDP is less than potential GDP. To increase…
10.  Legislative lags associated with fiscal policy are due to all of the following, except:   the political infighting involved in approving changes in government spending or taxes the poor and conflicting data available to policymakers. the delays in assessing the real state of the economy. the forecasting deficiencies of econometric models.
What issue or problem in the economy would be fixed with expansionary fiscal policy? Contractionary fiscal policy?
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