### Multiple Choice Question on Economic Policies**Question:**_All of the following are likely to be effective at eliminating a recessionary gap except one. Which is the exception?_- a. Reducing personal income taxes- b. Increasing government expenditures on the interstate highway network- c. Reducing Social Security payments to beneficiaries- d. Increasing farm subsidies- e. Reducing corporate income taxes**Explanation:**Options a, b, d, and e are all examples of fiscal policies that can stimulate the economy and help eliminate a recessionary gap by either increasing aggregate demand or supporting economic activities directly. However, option c (Reducing Social Security payments to beneficiaries) is an example of contractionary fiscal policy, as it effectively reduces the disposable income of individuals, thereby decreasing overall consumption and demand in the economy.**Answer:**- **c. Reducing Social Security payments to beneficiaries****Note:** There are no graphs or diagrams associated with this question.

Recessionary gap: It means a situation wherein the real GDP is lower than the potential GDP at the…

All of the following are likely to be effective at eliminating a recessionary gap except one. Which is the exception? a. Reducing personal income taxes O b. Increasing government expenditures on the interstate highway network O . Reducing Social Security payments to beneficiaries d. Increasing farm subsidies e. Reducing corporate income taxes

All of the following are likely to be effective at eliminating a recessionary gap except one. Which is the exception? a. Reducing personal income taxes O b. Increasing government expenditures on the interstate highway network O . Reducing Social Security payments to beneficiaries d. Increasing farm subsidies e. Reducing corporate income taxes

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

3. What is fiscal equalization? Give an example
5. If an economy has a recessionary expenditure gap, the government could attempt to bring the economy back toward the full-employment level of GDP by taxes or government expenditures.
Suppose there is a simultaneous increase in government spending (fiscal policy) and autonomous consumption, what would happen to consumption C. tax generation T and national income Y? C+ BT-bY = Co T-tY To -C+Y = Io + Go (National Income Equation) (Consumption Function) (Income-Dependent Tax)
To determineThe government expenditure required to retain the full employment level in the economy
What happens if there is an increase in the budget deficit? O O Raise the real Interest rate and decline the quantity of loanable funds demanded for Investment Lower the real Interest rate and decrease the quantity of loanable funds demanded for Investment. Lower the real Interest rate and increase the quantity of loanable funds demanded for Investment. Raise the real Interest rate and increase the quantity of loanable funds demanded for Investment. Reset Answer
Question 15/28 IV A BOOKMARK 15 MULTIPLE SELECT: If the government decides to utilize a contractionary fiscal policy, which of the following actions can it take? Pick all that apply. A Tax cuts B Tax increases C Spending cuts D Spending increases DELL esc Ce @ # $ % & 1 2 3 4 7 e r y k S f g. C V b m 个 N
3 In the definition of marginal propensity to consume, marginal refers to ______.
With the following images, explain what is meant by a cyclical deficit
If Congress wanted to help the economy out of a recession, they would be most likely to: check all that apply increase interest rates reduce government spending O increase transfer payments O decrease taxes
3. Focusing on the tax cut of 1964, the personal current tax receipts for 1965, the year after the tax cut is $ _______ billion. 4. Focusing on the tax cut of 1964, the personal current tax receipts for 1966, two years after the tax cut is $ _______ billion. 5. Focusing on the tax cut of 1964, the personal current tax receipts for 1967, three years after the tax cut is $ _______ billion.
3
1. If equilibrium national income is higher than the potential income at full- employment, there will be in the economy a.deflationary gap b.recessionary gap c.inflationary gap d. inequality gap