The government possesses the tools necessary to influence the output level in the short run through use of monetary and fiscal policy. However, there is some debate regarding whether the government should attempt to stabilize the economy. Which of the following are arguments in favor of active stabilization policy by the government? Check all that apply. The current tax system acts as an automatic stabilizer. Changes in government purchases and taxation must be passed by both houses of Congress and signed by the president. Shifts in aggregate demand are often the result of waves of pessimism or optimism among consumers and businesses. The Fed can effectively respond to excessive pessimism by expanding the money supply and lowering interest rates. Which of the following policies are examples of automatic stabilizers? Check all that apply. Corporate income taxes Personal income taxes The federal funds rate

The government possesses the tools necessary to influence the output level in the short run through use of monetary and fiscal policy. However, there is some debate regarding whether the government should attempt to stabilize the economy. Which of the following are arguments in favor of active stabilization policy by the government? Check all that apply. The current tax system acts as an automatic stabilizer. Changes in government purchases and taxation must be passed by both houses of Congress and signed by the president. Shifts in aggregate demand are often the result of waves of pessimism or optimism among consumers and businesses. The Fed can effectively respond to excessive pessimism by expanding the money supply and lowering interest rates. Which of the following policies are examples of automatic stabilizers? Check all that apply. Corporate income taxes Personal income taxes The federal funds rate

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

Supply-side fiscal policy initiatives include the following items EXCEPT: Group of answer choices R&D tax credits Education policies (subsidies or tax breaks) Lower corporate profit tax rates Open market operations
Long-run economic growth can be achieved with Group of answer choices A rightward shift in the aggregate demand curve. A rightward shift in the long-run aggregate supply curve. Neutral monetary policy. Contractionary fiscal policy.
Which one of the following actions in the IS-LM model would result in an increase in the budget deficit and an increase in the interest rate? (a) Expansionary fiscal policy together with expansionary monetary policy; (b) Contractionary fiscal policy; (c) Expansionary fiscal policy together with contractionary monetary policy; (d) Expansionary monetary policy.
Which of the following would not be considered an automatic stabilizer? Question 13 options: Income tax Unemployment compensation Education spending Food stamps
Which of the following is an example of an automatic stabilizer? tax rates the MPC the amount of dollars collected in taxes interest rates
The rational expectations theory suggests that as the public learns more about the effects of fiscal and monetary policy, in the pursuit of their own self interest they take actions that make Group of answer choices monetary policy more powerful than fiscal policy. fiscal policy more powerful than monetary policy. fiscal and monetary policy ineffective in achieving their stated aims. fiscal and monetary policy effective in achieving their stated aims.
How did the US use countercyclical fiscal policy as a recovery tool during the stock market crash of 2008?
What is the appropriate fiscal policy to lower the unemployment rate? Group of answer choices decrease the money supply increase the money supply increase taxes decrease government spending increase government spending do nothing
Suppose that an economy is in equilibrium at a level of output of $600 million. Suppose further that the full employment level output is $2000 million. What can the President along with Congress do in order to attain the full employment output? Group of answer choices Increase the taxes. Decrease the taxes. Sell government securities. Decrease the government spending.
Monetary and fiscal policy making that is carried out in response to a pre-set rule and does not respond to changes in economic activity is known as discretionary policy making. active policy making. Keynesian policy making. nondiscretionary policy making.
Which of the following is an example of an action where crowding-out could occur? A decrease in government housing subsidies causes an increase in private spending on housing. The government lowers taxes, but spending does not increase. The government increases spending but does not increase taxes, and the size of the budget deficit increases. The government invests in education, shifting the long-run aggregate supply curve to the right. The government pays $2 million to workers who have lost their jobs in the form of unemployment compensation.
The time lag for monetary policy is typically ______________ the time lag for fiscal policy. a) shorter than b) about the same as c) longer than d) the same as