MACROECONOMICS FOR TODAY
10th Edition
ISBN: 9781337613057
Author: Tucker
Publisher: CENGAGE L
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Question
Chapter 11, Problem 11SQ
To determine
The reason why the automatic stabilizers lean against the prevailing wind of business cycles.
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Fiscal drag is where
Select one:
a.there is a lag in government spending having any effect.
b.increases in nominal wages push taxpayers up tax brackets.
c.increases in government spending hold back economic growth.
d.taxpayers look for ways to avoid paying tax they perceive is unfair.
One criticism of the fiscal policy ineffectiveness is because:
A.the velocity of money is predictable.
B.it is dependent on Congress' approval.
C.the crowding-out effect increases investment.
D.prices and wages are sticky in the short run.
Fiscal policy consists of the executive branch's decisions to tax and spend. If the economy is in an expansionary mode just coming out of a recession, in regards to aggregate demand and aggregate supply, we can assume that a tax hike will lead to
a.
aggregate supply to shift inward.
b.
the economy expanding even more as a result.
c.
aggregate demand to shift inward.
d.
no changes will occur.
e.
aggregate demand and supply to shift inward.
Chapter 11 Solutions
MACROECONOMICS FOR TODAY
Ch. 11.3 - Prob. 1YTECh. 11 - Prob. 1SQPCh. 11 - Prob. 2SQPCh. 11 - Prob. 3SQPCh. 11 - Prob. 4SQPCh. 11 - Prob. 5SQPCh. 11 - Prob. 6SQPCh. 11 - Prob. 7SQPCh. 11 - Prob. 8SQPCh. 11 - Prob. 9SQP
Ch. 11 - Prob. 10SQPCh. 11 - Prob. 11SQPCh. 11 - Prob. 1SQCh. 11 - Prob. 2SQCh. 11 - Prob. 3SQCh. 11 - Prob. 4SQCh. 11 - Prob. 5SQCh. 11 - Prob. 6SQCh. 11 - Prob. 7SQCh. 11 - Prob. 8SQCh. 11 - Prob. 9SQCh. 11 - Prob. 10SQCh. 11 - Prob. 11SQCh. 11 - Prob. 12SQCh. 11 - Prob. 13SQCh. 11 - Prob. 14SQCh. 11 - Prob. 15SQCh. 11 - Prob. 16SQCh. 11 - Prob. 17SQCh. 11 - Prob. 18SQCh. 11 - Prob. 19SQCh. 11 - Prob. 20SQ
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- Is expansionary fiscal policy more attractive to politicians who believe in larger government or to politicians who believe in smaller government? Explain your answer.arrow_forward7. Non-discretionary fiscal policy designed to counteract a reduction in aggregate demand might include A. an increase in the money stock. B. a return to the gold standard. C. increased government spending on unemployment benefits. D. all of the options are correct.arrow_forwardWhich of these are examples of automatic stabilizers? A. sales tax revenues and income security B. sales tax rates and income security C. sales tax rates and transfer payments D. income tax revenues and transfer payments Option C is WRONG, hoping to get the correct answer with an explanation.arrow_forward
- If Canada's economy moves into an expansionary phase of the business cycle, then: Group of answer choices A. government spending and tax revenue will increase because of automatic stabilizers. B.government spending and tax revenue will decrease because of automatic stabilizers. C.automatic stabilizers will decrease government spending and increase tax revenue. D.automatic stabilizers will increase government spending and decrease tax revenue.arrow_forwardWhich of the following is not an automatic stabilizer? A. Unemployment compensation. B. Defense spending. C. Progressive income tax rates (that is, higher marginal tax rates that rise with income). D. All of the answers are automatic stabilizersarrow_forwardFiscal stance refers to: Select one: A. A government that takes a tough stance when it comes to running the country’s finances B. A government that is running a budget deficit C. A government that is running a budget surplus D. Whether a government is pursuing an expansionary or contractionary fiscal policyarrow_forward
- Title Actions by the Federal Government that decrease the progressivity of the tax system: a. decrease th Description Actions by the Federal Government that decrease the progressivity of the tax system: a. decrease the amount of government spending b. increase the effects of automatic stabilizers c. decrease the effects of automatic stabilizers d. increase the amount of taxationarrow_forwardAn increase in the tax rates as a result of a new tax law passed by Congress is an example of ________. a. discretionary fiscal policy b. increasing the government debt c. increasing the government deficit d. needs-tested taxing change.arrow_forward
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