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One advantage of automatic fiscal policy over discretionary fiscal policy is that automatic fiscal policy:
No, because the government can refinance the public debt by selling new bonds
Start of the recession and the time it takes to recognize that the recession has started
Nondiscretionary
is aimed at reducing aggregate demand and thus achieving price stability.
Decrease and transfer payments increase
It leads to fewer incentives to bear risk and innovate
Decrease taxes and increase government spending
Is not subject to the timing problems of discretionary policy
When changes to taxes and spending occur in the economy without explicit action by the Federal government, such policy is:
No, because the government can refinance the public debt by selling new bonds
Start of the recession and the time it takes to recognize that the recession has started
Nondiscretionary
is aimed at reducing aggregate demand and thus achieving price stability.
Decrease and transfer payments increase
It leads to fewer incentives to bear risk and innovate
Decrease taxes and increase government spending
Is not subject to the timing problems of discretionary policy
Which is an important consequence of the public debt of the United States?
No, because the government can refinance the public debt by selling new bonds
Start of the recession and the time it takes to recognize that the recession has started
Nondiscretionary
is aimed at reducing aggregate demand and thus achieving price stability.
Decrease and transfer payments increase
It leads to fewer incentives to bear risk and innovate
Decrease taxes and increase government spending
Is not subject to the timing problems of discretionary policy
Which combination of fiscal policy actions would be most stimulative for an economy in a deep recession?
No, because the government can refinance the public debt by selling new bonds
Start of the recession and the time it takes to recognize that the recession has started
Nondiscretionary
is aimed at reducing aggregate demand and thus achieving price stability.
Decrease and transfer payments increase
It leads to fewer incentives to bear risk and innovate
Decrease taxes and increase government spending
Is not subject to the timing problems of discretionary policy
Which is an example of an automatic stabilizer? As real GDP decreases, income tax revenues:
No, because the government can refinance the public debt by selling new bonds
Start of the recession and the time it takes to recognize that the recession has started
Nondiscretionary
is aimed at reducing aggregate demand and thus achieving price stability.
Decrease and transfer payments increase
It leads to fewer incentives to bear risk and innovate
Decrease taxes and increase government spending
Is not subject to the timing problems of discretionary policy
Contractionary fiscal policy is so named because it:
No, because the government can refinance the public debt by selling new bonds
Start of the recession and the time it takes to recognize that the recession has started
Nondiscretionary
is aimed at reducing aggregate demand and thus achieving price stability.
Decrease and transfer payments increase
It leads to fewer incentives to bear risk and innovate
Decrease taxes and increase government spending
Is not subject to the timing problems of discretionary policy
A person states that: A large public debt will bankrupt the United States government. An economist is likely to respond:
No, because the government can refinance the public debt by selling new bonds
Start of the recession and the time it takes to recognize that the recession has started
Nondiscretionary
is aimed at reducing aggregate demand and thus achieving price stability.
Decrease and transfer payments increase
It leads to fewer incentives to bear risk and innovate
Decrease taxes and increase government spending
Is not subject to the timing problems of discretionary policy
One timing problem with fiscal policy to counter a recession is a recognition lag that occurs between the:
No, because the government can refinance the public debt by selling new bonds
Start of the recession and the time it takes to recognize that the recession has started
Nondiscretionary
is aimed at reducing aggregate demand and thus achieving price stability.
Decrease and transfer payments increase
It leads to fewer incentives to bear risk and innovate
Decrease taxes and increase government spending
Is not subject to the timing problems of discretionary policy
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