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Click Clickon onthe thebutton buttontotogo gototothe theQuestion problem © 2013 Pearson Fiscal Policy 32 CLICKER QUESTIONS © 2013 Pearson Click Clickon onthe thebutton buttontotogo gototothe theQuestion problem Checkpoint 32.1 Checkpoint 32.2 Checkpoint 32.3 Question 1 Question 4 Question 8 Question 2 Question 5 Question 9 Question 3 Question 6 Question 10 Question 7 © 2013 Pearson CHECKPOINT 32.1 Question 1 When government outlays exceed tax revenues, the government ______. A. has a budget with a positive balance B. has a budget deficit C. has a budget surplus D. has a budget with a negative debt E. must cut its expenditure because outlays cannot exceed tax revenues © 2013 Pearson CHECKPOINT 32.1 Question 2 National debt decreases in a given year when the government of the country has a ______. A. budget deficit B. balanced budget C. budget supplement D. budget surplus E. zero budget balance © 2013 Pearson CHECKPOINT 32.1 Question 3 In the United States, _______ proposes the budget, and _____ signs the budget act into law. A. B. C. D. E. Congress; Congress the House of Representatives; the president the Senate; the Treasury Secretary the president; Congress the Treasury Secretary; Congress © 2013 Pearson CHECKPOINT 32.2 Question 4 The ____ view says that fiscal stimulus has a multiplier effect that makes it a ____ tool to fight a deep recession. A. mainstream; useful B. mainstream; weak C. Keynesian; useful D. Keynesian; useless E. None of the above answers is correct. © 2013 Pearson CHECKPOINT 32.2 Question 5 An example of fiscal stimulus policy is ______. A. the automatic increase in needs-tested spending in a recession B. induced taxes C. a decrease government expenditure on goods and services D. a decrease in needs-tested spending E. a cut in taxes © 2013 Pearson CHECKPOINT 32.2 Question 6 If the economy is at an above full-employment equilibrium, ____ gap exists, and discretionary fiscal policy that ____ will return real GDP to potential GDP. A. an inflationary; increases aggregate demand B. an inflationary; decreases aggregate demand C. a recessionary; increases aggregate supply D. a recessionary; decreases aggregate supply E. a recessionary; decreases aggregate demand © 2013 Pearson CHECKPOINT 32.2 Question 7 Discretionary fiscal policy is hampered by _____. A. induced taxes and automatic stabilizers B. law-making time lags, estimation of potential GDP, and economic forecasting C. economic forecasting, law-making time lags, and induced taxes D. automatic stabilizers, law-making time lags, and potential GDP estimation E. automatic stabilizers and induced taxes © 2013 Pearson CHECKPOINT 32.3 Question 8 Full employment is determined in the market for ____ and that quantity, along with the ____, determines potential GDP. A. B. C. D. E. loanable funds; production function goods and services; labor market labor; tax rate labor; production function labor; tax wedge © 2013 Pearson CHECKPOINT 32.3 Question 9 The supply-side effects of an income tax cut ____ potential GDP and ____ aggregate supply. A. increase; increase B. increase; decrease C. decrease; increase D. decrease; decrease E. increase; do not change © 2013 Pearson CHECKPOINT 32.3 Question 10 If fiscal stimulus creates a large budget ____, then in the long run, economic growth will ____. A. surplus; increase B. surplus; decrease C. deficit; increase D. deficit; decrease E. balance; not change © 2013 Pearson
