Principles of Economics 2e
2nd Edition
ISBN: 9781947172364
Author: Steven A. Greenlaw; David Shapiro
Publisher: OpenStax
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Textbook Question
Chapter 30, Problem 32RQ
Why do automatic stabilizers function “automatically?”
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Chapter 30 Solutions
Principles of Economics 2e
Ch. 30 - When governments run budget deficits, how do they...Ch. 30 - When governments run budget surpluses, what is...Ch. 30 - Is it possible for a nation to run budget deficits...Ch. 30 - Suppose that gifts were taxed at a rate of 10 for...Ch. 30 - If an individual owns a corporation for which he...Ch. 30 - What taxes would an individual pay if he were...Ch. 30 - The social security tax is 6.2 on employees income...Ch. 30 - Debt has a certain self-reinforcing quality to it....Ch. 30 - True or False: Federal spending has grown...Ch. 30 - What is the main reason for employing...
Ch. 30 - What is the main reason for employing expansionary...Ch. 30 - In a recession, does the actual budget surplus or...Ch. 30 - What is the main advantage of automatic...Ch. 30 - Explain how automatic stabilizers work, both on...Ch. 30 - What would happen if expansionary fiscal policy...Ch. 30 - What would happen if contractionary fiscal policy...Ch. 30 - Do you think the typical time lag for fiscal...Ch. 30 - How would a balanced budget amendment affect a...Ch. 30 - How would a balanced budget amendment change the...Ch. 30 - Give some examples of changes in federal spending...Ch. 30 - Have the spending and taxes of the U.S. federal...Ch. 30 - What are the main categories of U.S. federal...Ch. 30 - What is the difference between a budget deficit, a...Ch. 30 - Have spending and taxes by state and local...Ch. 30 - What are the main categories of U.S. federal...Ch. 30 - What is the difference between a progressive tax,...Ch. 30 - What has been the general pattern of U.S. budget...Ch. 30 - What is the difference between a budget deficit...Ch. 30 - What is the difference between expansionary fiscal...Ch. 30 - Under what general macroeconomic circumstances...Ch. 30 - What is the difference between discretionary...Ch. 30 - Why do automatic stabilizers function...Ch. 30 - What is the standardized employment budget?Ch. 30 - What are some practical weaknesses of...Ch. 30 - What are some of the arguments for and against a...Ch. 30 - Why is government spending typically measured as a...Ch. 30 - Why are expenditures such as crime prevention and...Ch. 30 - Why is spending by the U.S. government on...Ch. 30 - Excise taxes on tobacco and alcohol and state...Ch. 30 - What is the benefit of having state and local...Ch. 30 - In a booming economy, is the federal government...Ch. 30 - Economist Arthur Laffer famously pointed out that,...Ch. 30 - Is it possible for a nation to run budget deficits...Ch. 30 - How will cuts in state budget spending affect...Ch. 30 - Is expansionary fiscal policy more attractive to...Ch. 30 - Is Medicaid (federal government aid to low-income...Ch. 30 - What is a potential problem with a temporary tax...Ch. 30 - If the government gives a 300 tax cut to everyone...Ch. 30 - Do you agree or disagree with this statement: It...Ch. 30 - During the Great Recession of 20082009, what...Ch. 30 - A government starts off with a total debt of $3.5...Ch. 30 - If a government runs a budget deficit of 10...Ch. 30 - Specify whether expansionary or contractionary...
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Similar questions
- What does the concept of "crowding out" mean in macro economics according to John Maynard Keynes?arrow_forwardUnemployment insurance and welfare programs work as automatic stabilizers. True Falsearrow_forwardHow would a Keynesian Economist use Fiscal Policy to fight a Recession? Please do not write about Monetary Policy here, only Fiscal Policy.arrow_forward
- Does MPC matter when using taxes to stimulate the economy in the short-run?arrow_forwardTrue or false? Why?"A temporary tax rise never has a significant effect on current consumption."arrow_forwardFrom 2008, how might monetary policy (as reflected in the OCR) have affected the degree of crowding out resulting from fiscal policy (as reflected in government expenditure)?arrow_forward
- How can a tax cut increase investment, and what is the impact on the economy?arrow_forwardSuppose a government has a tax revenue shortfall. Will hyperinflation inevitably follow unless the government cuts its fiscal expenditures?arrow_forwardDoes Ricardian equivalence imply that changes in the timing of government expenditure have no effect on the economy? Explain.arrow_forward
- According to Keynesian economics, what impact would a balanced budget amendment to the constitution requiring the federal government to balance its budget annually have on the economy?arrow_forwardWhich of the following is an example of an automatic stabilizer? When the economy goes into a recession,… a.More people become eligible for unemployment insurance benefits. b.Stock prices decline, particularly for firms in cyclical industries. c.Congress begins hearings about a possible stimulus package. d.The Federal Reserve changes its target for the federal funds rate. Reason why B, C, D are wrong?arrow_forwardWhy do rich people have a higher marginal propensity to save than poor people?arrow_forward
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