econ201 homework 6 quiz latest 2015

Chapter 17 Random

Question 1 1 / 1 point

If the economy is producing less than its potential GDP, _____________________ will show a larger deficit than the actual budget.

Question options:

a)

discretionary fiscal policy

b)

the automatic stabilizers

c)

the standardized employment budget

d)

expansionary fiscal policy

Question 2 0 / 1 point

During a recession, if a government uses an expansionary fiscal policy to increase GDP, the:

Question options:

a)

aggregate demand curve will shift to the right.

b)

aggregate supply curve will shift to the right.

c)

aggregate demand curve will shift to the left.

d)

aggregate supply curve will shift to the left.

Question 3 0 / 1 point

When inflation begins to climb to unacceptable levels in the economy, the government should:

Question options:

a)

use expansionary fiscal policy to shift aggregate demand to the right.

b)

use contractionary fiscal policy to shift aggregate demand to the left.

c)

use contractionary fiscal policy to shift aggregate demand to the right.

d)

use expansionary fiscal policy to shift aggregate demand to the left.

Question 4 1 / 1 point

A ______________________ means that government spending and taxes are equal.

Question options:

a)

contractionary fiscal policy

b)

fiscal budget

c)

discretionary fiscal policy

d)

balanced budget

Question 5 0 / 1 point

In 2010, Microsoft will pay corporate income tax to the federal government based on the company's __________________.

Question options:

a)

corporate profits

b)

optional tax rate

c)

proportional tax rate

d)

excise profits

Question 6 0 / 1 point

A ______________________ is created each time the federal government spends more than it collects in taxes in a given year.

Question options:

a)

regressive tax

b)

corporate tax

c)

budget deficit

d)

budget surplus

Question 7 1 / 1 point

When increasing oil prices cause aggregate supply to shift to the left, then:

Question options:

a)

unemployment decreases and inflation increases.

b)

unemployment and inflation increase.

c)

unemployment and inflation decrease.

d)

unemployment increases and inflation decreases.

Question 8 1 / 1 point

If a country’s GDP increases, but its debt decreases during that year, then the country’s debt to GDP ratio for the year will _______________ in proportion to the magnitude of the changes.

Question options:

a)

decrease

b)

increase because GDP increased

c)

decrease because its debt decreased

d)

increase or decrease

Question 9 1 / 1 point

Which of the following terms is used to describe the set of policies that relate to government spending, taxation, and borrowing?

Question options:

a)

economic policies

b)

monetary policies

c)

financial policies

d)

fiscal policies

Question 10 0 / 1 point

The time lag for monetary policy is typically ________________ the time lag for fiscal policy.

Question options:

a)

shorter than

b)

about the same as

c)

the same as

d)

longer than

Question 11 0 / 1 point

A __________________________ policy will cause a greater share of income to be collected from those with high incomes than from those with lower incomes.

Question options:

a)

regressive tax

b)

proportional tax

c)

excise tax

d)

progressive tax

Question 12 1 / 1 point

In 2009, the U.S. government spent $1.4 trillion more than it collected in taxes. This deficit was about:

Question options:

a)

22% of the size of the U.S. GDP in 2009.

b)

10% of the size of the U.S. GDP in 2009.

c)

18 % of the size of the U.S. GDP in 2009.

d)

26% of the size of the U.S. GDP in 2009.

Question 13 0 / 1 point

When a country's economy is producing at a level that exceeds its potential GDP, the standardized employment budget will show a __________________ than the actual budget.

Question options:

a)

smaller surplus

b)

smaller deficit

c)

larger deficit

d)

surplus

Chapter 17 problems

Question 14 0 / 1 point

If the state of Washington's government collects $75 billion in tax revenues in 2013 and total spending in the same year is $74.8 billion, the result will be a:

Question options:

a)

budget surplus.

b)

budget deficit.

c)

decrease in payroll tax.

d)

decrease in proportional taxes.

Question 15 0 / 1 point

A government collects $700 billion annually in tax revenue. Each year it allocates $130 billion to interest payments that it must pay on its accumulated debt. What percentage of annual tax revenue is allocated to make these interest payments?

Question options:

a)

18.57%

b)

27.58%

c)

28.75%

d)

17.15%

Question 16 1 / 1 point

A government annually collects $230 billion in tax revenue and allocates $29 billion to its universal healthcare spending. What percentage of this government's budget is spent on healthcare?

Question options:

a)

26.63%

b)

16.43%

c)

21.90%

d)

12.60%

Question 17 0 / 1 point

If government tax policy requires Peter to pay $15,000 in tax on annual income of $200,000 and Paul to pay $10,000 in tax on annual income of $100,000, then the tax policy is:

Question options:

a)

optional.

b)

proportional.

c)

regressive.

d)

progressive.

Chapter 18 Random Questions

Question 18 1 / 1 point

In the U.S. economy, the offsetting effects of private saving compared to government borrowing are typically noted as being represented by which of the following ratios?

Question options:

a)

slightly less than one-to-one

b)

slightly more than two-to-one

c)

much more than two-to-one

d)

much less than one-to-one

Question 19 1 / 1 point

In most developed countries, the government plays a large role in society’s investment in human capital through _________________________.

Question options:

a)

direct spending

b)

private sector R&D

c)

tax incentives

d)

the education system

Question 20 1 / 1 point

Ricardian equivalence means that:

Question options:

a)

changes in exports offset any changes in the government deficit.

b)

changes in imports offset any changes in the government deficit.

c)

changes in private savings offset any changes in the government deficit.

d)

changes in investment offset any changes in the government deficit.

Question 21 1 / 1 point

A ___________________________________ can lead to disruptive economic patterns and heavy strains on a country’s banking and financial system.

Question options:

a)

prolonged period of budget surpluses

b)

prolonged period of trade surpluses

c)

sustained pattern of large trade deficits

d)

sustained pattern of large budget deficits

Question 22 1 / 1 point

A country's economic data indicates that there has been a substantial reduction in the financial capital available to private sector firms. Which of the following most likely had the greatest influence on this economy?

Question options:

a)

increased borrowing by private firms

b)

especially large and sustained government borrowing

c)

reduction in influx of funds for foreign financial investors

d)

especially large and sustained household saving

Question 23 1 / 1 point

A moderate increase in a budget deficit that leads to a _____________________ is not necessarily a cause for concern.

Question options:

a)

a series of large budget deficits

b)

moderate increase in a trade deficit and a moderate appreciation of the exchange rate

c)

shift in aggregate demand so far to the right that it causes high inflation

d)

combination of less foreign capital and banks that are bankrupt

Question 24 1 / 1 point

When a business firm makes an investment in physical capital, what is that investment subject to?

Question options:

a)

state and local government incentives

b)

the discipline of the market

c)

economic output and productivity

d)

political orientated incentives

Question 25 1 / 1 point

A __________________ often results in an outflow of financial capital leaving the domestic economy and being invested in the global economy?

Question options:

a)

fiscal deficit

b)

trade deficit

c)

twin surplus

d)

trade surplus

Question 26 1 / 1 point

A ____________________________ is one economic mechanism by which government borrowing can crowd out private investment.

Question options:

a)

larger trade surplus

b)

smaller trade surplus

c)

higher interest rate

d)

deficit decrease

Question 27 1 / 1 point

_______________________________ can set the stage for international financial investors first to send their funds to a country and cause an appreciation of its exchange rate and then to pull their funds out and cause a depreciation of the exchange rate and a financial crisis as well.

Question options:

a)

Crowding out

b)

Twin deficits

c)

Trade balance

d)

Trade deficits

Question 28 1 / 1 point

A reduction in government borrowing can:

Question options:

a)

give private investment an opportunity to expand.

b)

decrease the incentive to invest.

c)

crowd out private investment in human capital.

d)

increase the interest rate.

Question 29 1 / 1 point

An additional investment in human capital, especially for the low-income nations of the world, will likely directly increase which of the following?

Question options:

a)

highly qualified teachers

b)

increased levels of R&D spending

c)

consumer orientated spin-offs

d)

productivity and economic growth

Question 30 1 / 1 point

When a government records a budget surplus, the national savings and investment identity is written as:

Question options:

a)

S + (T - G) = 1 + (X - M)

b)

S - (G - T) = I - (X - M)

c)

S + (M - X) + (T - G) = I

d)

S = I + (G - T) + (X - M)

Chapter 18 important questions

Question 31 0 / 1 point

A government began 2013 with a budget deficit and a trade deficit. During the year, the government changed its policy and is now running a budget surplus. If all other factors hold constant, this change in policy will cause:

Question options:

a)

the exchange rate to decrease and the trade deficit to increase.

b)

the exchange rate and the trade deficit to decrease.

c)

the exchange rate to increase and the trade deficit to decrease.

d)

the exchange rate and the trade deficit to increase.

Question 32 1 / 1 point

Which of the following is not a consequence of an increase in the government's budget deficit?

Question options:

a)

imports increase while exports and all other variables are held constant

b)

exports increase while imports and all other variables are held constant

c)

private savings increases while holding everything else constant

d)

investment falls while holding everything else constant

Question 33 0 / 1 point

Suppose you are analyzing data for an economy in which Ricardian neutrality holds true. If the budget deficit increases by 50, then:

Question options:

a)

investment will decrease by 50

b)

private savings will decrease by 50

c)

private savings will increase by 50

d)

investment will increase by 50

Question 34 1 / 1 point

When government policy moves from a budget deficit to a budget surplus and the trade deficit remains constant:

Question options:

a)

savings will increase if investment remains constant.

b)

investment will increase if savings remain constant.

c)

savings will decrease, no matter what happens to investment.

d)

investment will decrease if savings remain constant.

Question 35 0 / 1 point

If a government's budget deficits are increasing aggregate demand when the economy is already producing near potential GDP, causing a threat of an inflationary increase in price levels, then the central bank may react with:

Question options:

a)

a discretionary monetary policy.

b)

a contractionary monetary policy.

c)

an expansionary monetary policy.

d)

a loose monetary policy.

Question 36 0 / 1 point

If the U.S. economy is producing at a level that is substantially less than potential GDP and the government's budget deficits are increasing aggregate demand, then ____________________________ is not much of a danger.

Question options:

a)

an inflationary increase in the price level

b)

a tight monetary policy

c)

the central bank's contractionary monetary policy

d)

international financial investment