Question: Expansionary fiscal policy is characterized by: A) Increased government spending and/or lower taxes B) Decreased government spending and/or higher taxes C) Stable government spending and constant tax rates D) Unchangedgovernment spending but reduced tax rates

Expansionary fiscal policy aims to stimulate economic growth and demand by increasing government…

Answered: Question: Expansionary fiscal policy is…

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter30: Government Budgets And Fiscal Policy

Section: Chapter Questions

Problem 45CTQ: Is expansionary fiscal policy more attractive to politicians who believe in larger government or to...

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Similar questions

What would happen if contractionary fiscal policy were implemented during an economic boom but, due to Lag, it did not take effect until the economy slipped into recession?
What is the main reason for employing contractionary fiscal policy in a time of strong economic growth?
Do you agree or disagree with this statement: It is in the best interest of our economy for Congress and the President to run a balanced budget each year. Explain your answer.
How would a balanced budget amendment change the effect of automatic stabilizer programs?
What is the difference between discretionary fiscal policy and automatic stabilizers?
How would a balanced budget amendment affect a decision by Congress to grant a tax cut during a recession?
Specify whether expansionary or contractionary fiscal policy would seem to be most appropriate in response to each of the situations below and sketch a diagram using aggregate demand and aggregate supply curves to illustrate your answer: A recession. A stock market collapse that hurts consumer and business confidence. Extremely rapid growth of exports. Rising inflation. A rise in the natural rate of unemployment. A rise in oil prices.
When governments run budget deficits, how do they make up the differences between tax revenue and spending?
What would happen if expansionary fiscal policy was implemented in a recession but, due to lag, did not actually take effect until after the economy was back to potential GDP?
Have the spending and taxes of the U.S. federal government generally had an upward or a downward trend in the last few decades?
Why is government spending typically measured as a percentage of GDP rather than in nominal dollars?
True or False: Federal spending has grown substantially in recent decades. By world standards, the U.S. government controls a relatively large share of the U.S. economy. A majority of the federal governments revenue Is collected through personal income taxes. Education spending is slightly larger at the federal level than at the state and local level. State and local government spending has not risen much in recent decades. Defense spending is higher now than ever. The share of the economy going to federal taxes has increased substantially over time. Foreign aid is a large portion, although less than half, of federal spending. Federal deficits have been very large for the last two decades. The accumulated federal debt as a share of GDP is near an all-time high.

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Question: Expansionary fiscal policy is characterized by: A) Increased government spending and/or lower taxes B) Decreased government spending and/or higher taxes C) Stable government spending and constant tax rates D) Unchanged government spending but reduced tax rates