Income tax collections: Group of answer choices rise during a recession, thus reduce the severity of the recession. rise during a recession, thus increase the severity of the recession. fall during inflationary episodes, thus increase the severity of the inflation. fall during a recession, thus reducing the severity of the recession.

Income tax collections: Group of answer choices rise during a recession, thus reduce the severity of the recession. rise during a recession, thus increase the severity of the recession. fall during inflationary episodes, thus increase the severity of the inflation. fall during a recession, thus reducing the severity of the recession.

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter15: Fiscal Policy

Section: Chapter Questions

Problem 11SQ

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When disposable income increases, consumption expenditure decreases by the same amount. does not change. also increases, and by an equal amount. also increases, but by less. also increases, and by more. Demand-pull inflation starts with a decrease in aggregate supply. a decrease in aggregate demand. an increase in aggregate demand. an increase in aggregate supply. an increase in potential GDP.
Beginning at equilibrium E1 in Exhibit 1, when the government increases spending or cuts taxes the economy will experience: Group of answer choices an inflationary recession. stagflation. cost-push inflation. demand-pull inflation.
Demand–pull inflation occurs when increases until equilibrium output exceeds the full employment level.
Automatic stabilizers: A) counteract both recessions and expansions through changes in spending without government action. B) are government programs to employ workers during recessions. C) create government budget surpluses during economic recessions. D) are designed to reduce the price level directly.
Automatic stabilizers have the effect of Group of answer choices eliminating all recessions. inflation. increasing the long-run supply curve. reducing recessionary gaps.
Demand-pull inflation results from higher aggregate demand that [Select (1)]. As a result, output [Select (2)] as firms seek to meet this higher demand. This [Select (3)] the demand for workers and leads the economy towards [Select (4)], which causes the money wage to [Select (5)]. These higher costs of production cause prices to rise. (1) a - exceeds the economy's demand for goods and services b - exceeds the economy's ability to supply goods and services c - meets the economy's demand for goods and services d - meets the economy's supply for goods and services (2) a - increases b - decreases c - remains unchanged (3) a - increases b - decreases (4) a - unemployment b - full employment c - a recession (5) a - increase b - decrease c - remain unchanged
Which of the following scenarios is an example of a recognition lag? The economy: a)enters a deep recession on the same day that new quarterly data show positive economic growth. b)enters a deep recession, and parliament takes two months to approve an extensive tax-cut bill.b) c)enters a deep recession, and parliament passes spending bills for public works projects that will take years to plan and build. Which of the following scenarios is an example of an administrative lag? a)Policy makers obtain relevant economic data months after a recession has already begun. b)A new law requires that all new spending bills go through at least one month of debate before receiving a parliament vote. c)In response to a recession, parliament passes a spending bill for motorway upgrades that will take years to plan and complete Government financing of deficit spending can offset the deficit's expansionary effect if government borrowing increases interest…
When the inflation rate is expected to increase, the real cost of borrowing declines at any given interest rate; as a result, the ______ bonds increase and the ___________ curve shifts to the right. Group of answer choices demand for; demand demand for; supply supply of; demand supply of; supply
A sudden increase in consumer spending will shift the aggregate demand curve to the right and lower the price level/inflation and increase the level of GDP output. True /False
Suppose that the government decreases spending more than is necessary to close an inflationary gap. What is the MOST likely result? Inflation will increase. The price level will increase. Aggregate output will fall short of potential output. Aggregate output will increase.
During recessions, taxes tend to a. rise and thereby increase aggregate demand. b. fall and thereby decrease aggregate demand. c. fall and thereby increase aggregate demand. d. rise and thereby decrease aggregate demand.
Aggregate demand shifts right when the government Group of answer choices increases infrastructure expenditures. decreases the money supply. removes an investment tax credit increases taxes.