The text book describes various types of lags that may slow the response of Congress when the economy enters a recession. Which of the following describes the time required for Congress to recgonize that the economy is experiencing a recession? Recognition lag Legislative lag Presidential lag Implementation lag

The text book describes various types of lags that may slow the response of Congress when the economy enters a recession. Which of the following describes the time required for Congress to recgonize that the economy is experiencing a recession? Recognition lag Legislative lag Presidential lag Implementation lag

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter15: Fiscal Policy

Section: Chapter Questions

Problem 1SQ

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Which of the following is an appropriate fiscal policy response if the economy is in a state of rising inflation? Contractionary fiscal policy by decreasing government spending and taxes. Expansionary fiscal policy by increasing government spending and taxes. Contractionary fiscal policy by decreasing government spending and increasing taxes. Expansionary fiscal policy by increasing government spending and lowering taxes.
Government spending on unemployment benefits, welfare, Medicare, and other programs during a recession are known as a. social safety nets (automatic stabilizers) that limit the hardships created by a deflationary gap b. additional expenditures the government should not have to pay c. social safety nets (automatic stabilizers) that increase the hardships created by a recession d. social safety nets (automatic stabilizers) that limit the hardships created by an inflammatory gap
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…
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.
Which of the following would be a fiscal policy prescription for ending inflation? A) Raise taxes B) Increase government expenditures to let the multiplier work C) Raise interest rates to stimulate saving D) Promote exports to increase injections in the domestic economy
Fiscal policy can take much longer to act than monetary policy given there are lags that can occur in the process. The time that it takes to determine whether or not a recession has occurred is referred to as the a. recognition lag. b. legislative lag. c. implementation lag. d. structural lag.
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 rates and reduces private investment. The offsetting effect is known as the (crowding-out effect, consumption smoothing, cyclical budget deficit) Suppose the governments of two different economies, economy A and economy B, implement a tax cut of the same size. The tax cut in economy A is permanent, while the tax cut in economy B is temporary. The economies are identical in all other respects. The tax cut will have a larger…
Label each of the following scenarios in which there are problems enacting and applying fiscal policy as being an example of either recognition lag, administrative lag, or operational lag. To fight a recession, Congress has passed a bill to increase infrastructure spending but the legally required environmental impact statement for each new project will take at least two years to complete before any building can begin. Distracted by a war that is going badly, politicians take no notice until inflation reaches 8 percent. A sudden recession is recognized by politicians, but it takes many months of political deal making before a stimulus bill is finally approved. To fight a recession, the president orders federal agencies to get rid of petty regulations that burden private businesses – but the federal agencies begin by spending a year developing a set of regulations on how to remove petty regulations.
If the government were to implement a fiscal policy during a case of recession, all of these proposal are in line with the goal of fighting recession EXCEPT lowering income tax increasing government spending and lowering income tax increasing both government spending and income tax increasing government spending When there is a problem of a delay in terms of implementation of the fiscal policy, that would be categorized as _____. execution lag information lag decision lag
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
Consider an economy that is operating below the full-employment level of real GDP. What would be the effect of an increase in government spending on aggregate demand and real GDP?
Examine the following policies and determine which would decrease the level of aggregate demand. Decreasing in government spending and decreasing taxes Increasing investment and increasing government spending Increasing consumption and decreasing taxes Decreasing in government spending and increasing in taxes