Fiscal Policy: Taxes

Question 1

Which statement best describes the likely effects of an expansionary fiscal policy?

Revolt · Accepted Answer

It can reduce interest rates and unemployment, but increase inflation.

Question 2

A graph titled Total U S Government Spending as Percentage of G D P from 1990-2012 has year on the x-axis and percentage of G D P on the y-axis, from 15 to 30 percent in increments of 5. The percentage of G D P is lowest at 18 percent in 2001 and highest at 25 percent in 2009.

Revolt · Accepted Answer

one quarter of GDP.

Question 3

What does deficit spending require a government to do?

Revolt · Accepted Answer

take on debt

Question 4

Which of the following statements most accurately describes the federal government and its employees?

Revolt · Accepted Answer

Millions of Americans work for the federal government.

Question 5

A graph shows the U S Government and Expenditures from 1980 to 2010. The money spent and money received generally follow the same trend, but around 2008, the amount of money spent increased and money received decreased.

Revolt · Accepted Answer

2000 to 2010

Question 6

A flow chart shows an aspect of fiscal policy. Money goes from the government, to household, and to firms.

Revolt · Accepted Answer

government spending to strengthen the economy

Question 7

Which of these effects of expansionary spending would a government most want to avoid?

Revolt · Accepted Answer

higher inflation

Question 8

Spending that is required by law is known as

Revolt · Accepted Answer

mandatory spending.

Question 9

"Meeting the spending targets in this budget meant some very difficult choices."President Barack Obama,2012 Budget Message of the President

Revolt · Accepted Answer

deciding what would be funded and what would be cut

Question 10

What is the main goal in creating the federal budget?

Revolt · Accepted Answer

deciding how to manage the government’s tax revenue and expenditures

Fiscal Policy: Taxes Answers

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