legslation to raise taxes to control demand-pull intlation, then this would be i
ID: 1128646 • Letter: L
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legslation to raise taxes to control demand-pull intlation, then this would be it the U.S. Congress passes an example of a(n): A. Supply-side fiscal policy B. Expansionary fiscal policy C. Contractionary fiscal policy D. Nondiscretionary fiscal policy The set of fiscal policies that would be most contractionary would be a(n): A. Increase in government spending and taxes B. Decrease in government spending and taxes C. Increase in government spending and a decrease in taxes D. Decrease in government spending and an increase in taxes 9. 10·The intent of contractionary fiscal policy is to: A. Increase aggregate demand B. Decrease aggregate demand C. Increase aggregate supply D. Decrease aggregate supply 11. The goal of expansionary fiscal policy is to increase: A. The price level B. Aggregate supply C. Real GDP D. Unemployment 12. If the government wishes to increase the level of real GDP, it might reduce A. Taxes B. Transfer payments C. The size of the budget deficit D. Its purchases of goods and services is in a recession and prices are relatively stable, then the discretionary fiscal policy or icies that would most likely be recommended to correct this macroeconomic problem would be: Increased government spending or increased taxation, or a combination of the two actions eovernment spending or decreased taxation, or a combination of the two actions Increased government spending or increased taxation, but not a combination of the two actions D. Decreased g overnment spending or decreased taxation, or a combination of the two actions ny starts out with a balanced Federal budget. If the government then implements expansionary The econom fiscal policy, then there will be a: A. Trade deficit B. Trade surplus C. Budget deficit D. Budget surplus 14- fiscal policy would tend to make a budget deficit become 15. Contractionary A. Bigger B. Smaller C. A trade deficit D. A trade surplus 16. When government spending is increased, the amount of the increase in aggregate demand primarily depends on: A. The average propensity to consume B. The size of the multiplier C. Income taxes D. Exchange ratesExplanation / Answer
8.
The expansionary fiscal policy includes an increase in the government spending or reduces taxes or both.
The contractionary fiscal policy includes a decrease in the government spending or an increase taxes or both.
Since the U.S. Congress passes legislation for raising taxes for controlling demand-pull inflation, Hence it is an example of a contractionary fiscal policy.
Hence option C is the correct answer.
9.
The expansionary fiscal policy includes an increase in the government spending or reduces taxes or both.
The contractionary fiscal policy includes a decrease in the government spending or an increase taxes or both.
Hence the example of contractionary fiscal policy will be a decrease in government spending and an increase in taxes.
Hence option D is the correct answer.
10.
The expansionary fiscal policy includes an increase in the government spending or reduces taxes or both.
The contractionary fiscal policy includes a decrease in the government spending or an increase taxes or both.
The main purpose of a contractionary fiscal policy is to reduce the aggregate demand.
Hence option B is the correct answer.
11.
The expansionary fiscal policy includes an increase in the government spending or reduces taxes or both.
The contractionary fiscal policy includes a decrease in the government spending or an increase taxes or both.
The main purpose of an expansionary fiscal policy is to increase the aggregate demand. When AD increase, it leads to a rightward shift of the AD curve and therefore Real GDP increase and price also increase. But the main goal is to increase Real GDP.
Hence option C is the correct answer.
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