Graded Homework - Chapter 13

Government payments to households for which no good or service is provided in return are called:

A change in taxes or a change in government transfers affects consumption through its effect on:

(Figure: Short- and Long-Run Equilibrium II) Look at the figure Short- and Long-Run Equilibrium II. Which of the following would be the appropriate response on the part of the government upon viewing the state of the economy?

(Figure: Inflationary and Recessionary Gaps) Look at the figure Inflationary and Recessionary Gaps. A movement from AD1 to AD3 could be caused by:

Contractionary fiscal policy includes:

(Figure: Fiscal Policy Options) Look at the figure Fiscal Policy Options. If the aggregate demand curve is AD:

Which of the following is NOT an argument AGAINST the use of expansionary fiscal policy?

Assume that the marginal propensity to consume is 0.8 and potential output is $800 billion. The government spending multiplier is:

If the marginal propensity to consume is 0.75 and government purchases of goods and services decrease by $30 billion, real GDP will:

Suppose the marginal propensity to consume is 0.8 and the government cuts taxes by $40 billion. Real GDP will _____ by _____.

Discretionary fiscal policy refers to changes in:

When the economy is in a recession, tax receipts _____ and unemployment insurance payments _____.

(Scenario: Fiscal Policy) Look at the scenario Fiscal Policy. If actual output is 500 billion arcs, to restore the economy to potential output the government should _____ by 25 billion arcs.

The federal budget tends to move toward _____ as the economy ____.

Which of the following fiscal policies would make a budget surplus smaller or a budget deficit larger?

Over the past few decades in the United States, large federal budget deficits most often have been caused by:

What can the federal government do to finance a deficit?

In the United States in 2013, public debt accounted for about _____ of GDP.