Which of the following budget philosophies advocates keeping the budget in balance every year, except during wartime? a)Annually balanced budget   b)Cyclically balanced budget   c)Functional finance     A major problem with the implementation of this philosophy is that it: a)Magnifies business cycle fluctuations   b)Can allow the national debt to burgeon with chronic deficits   c)Relies upon government officials to budget for surpluses during boom times in order to cover deficits during recessions

Which of the following is NOT an automatic stabilizer? a. income taxes b. unemployment insurance c. Medicaid d. food stamps e. monetary policy

Hide student question Time Left : Determine whether each of the following is an example of a situation in which a direct expenditure offset to fiscal policy occurs. a. In an effort to help rejuvenate the nation's railroad system, a new government agency buys unused track, locomotives, and passenger and freight cars, many of which private companies would otherwise have purchased and put into regular use. b. The government increases its expenditures without raising taxes. To cover the resulting budget deficit, it borrows more funds from the private sector, thereby pushing up the market interest rate and discouraging private planned investment spending. c. The government finances the construction of a classical music museum that otherwise would never have received private funding.

Several problems of timing may arise in connection with fiscal policy. Which of the following is not one of them? Select one: a. An administrative lag occurs due to a significant lag between the time the need for fiscal action is recognized and the time action is taken by a government. b. Operational lag also occurs between the time fiscal action is taken and the time that action affects output, employment, or the price level. c. Crowding out lag occurs since governments delay to take action for not to crowd out exports. d. The recognition lag is the time between the beginning of recession or inflation and the certain awareness that it is actually happening.

Which of the following is true of the federal budget process in the U.S.? a. Detailed budgeting allows the party in power to reward supporters. b. Congress approves a budget that separates the capital budget and the operating budget. c. Most federal outlays are determined by existing laws. d. Congress must approve a budget with at least a two-thirds majority vote. e. The federal budget must be balanced each year because the volume of international trade reduces if the government has a surplus or a deficit.

Which of the following is NOT a fiscal policy action? Group of answer choices decreasing government spending on the arts lowering income tax rates. raising the quantity of money in circulation increasing government expenditures on military hardware

How did John Maynard Keynes economic theory influence the 20th Century fiscal policy?

Explain each of the tools that exist in expansionary fiscal policy and contractionary fiscal policy.

How does the government budget process impact fiscal policy decisions, and what are the potential consequences of budget deficits and surpluses? A) The government budget process has no bearing on fiscal policy decisions. B) The government budget process involves decisions about government spending and taxation; budget deficits occur when spending exceeds revenue, while surpluses occur when revenue exceeds spending. Deficits may lead to increased borrowing and interest payments, while surpluses can reduce government debt. C) The government budget process exclusively focuses on taxation and has no relation to spending. D) Budget deficits always lead to economic stability.

List what specific, deliberate actions the federal government could take to enact expansionary fiscal policy.