Determine the adverse macroeconomic consequences that a government faces when it maintains a long-term pattern of substantial budget deficits

Which of the following statements regarding government fiscal policy are correct? Assume ceteris paribus. a) The government's debt to GDP ratio will be increasing if there is a primary budget deficit. + b) Higher spending on interest payments increases government debt but does not increase the primary deficit. c) In a recession, a government using fiscal policy to stabilize aggregate demand will design its policy to override the automatic stabilizers. ◆ +

my choice is incorrect

Consider a potential fiscal policy used to curb a recession. How could a consumer and business expectations about the future economy could hamper those plans?

Suppose the economy had been producing at potential output but is now experiencing a recession. Which of the following are discretionary fiscal policies that could bring the economy closer to potential output? Check all that apply. a)Additional spending on national park facilities   b)A tax hike   c)A reduction in government purchases   d)A tax cut

In the context of budget deficits, what is crowding out?

Which of the following statements about automatic stabilizers in Canada is the most accurate? They are the responsibility of the provinces since they, unlike the federal government, do not face lag problems. They are controlled by the Bank of Canada to help manage the business cycle. They are able to completely eliminate all the lag problems associated with fiscal policy. They are changes in government transfer payments and tax revenues that vary automatically and inversely to business cycle changes.

Which of the following would not be considered an automatic stabilizer?   Question 13 options:   Income tax   Unemployment compensation   Education spending   Food stamps

The government has many tools at its disposal to help create stability for an economy. Explain the best type of fiscal policy for our economy right now. Analyze how the economy is doing and provide support for the type of fiscal policy you selected.

Which of the following is a reason for using expansionary fiscal policy during a recession? a) reduce unemployment  b) All of the choices are correct  c) help the economy return to full employment  d) help increase GDP, job opportunities, and production in the economy e) increase employment