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Macroeconomic Concepts—Fiscal Policy1)?If the federal government wants to encourage businesses and consumers to spend more money, it would MOST LIKELYA)increase the tax rate.B)decrease the tax rate.C)increase the reserve requirement.D)decrease government spending on goods and services.2)?The process by which the government manages spending and taxes to influence the direction of the economy isA)tax policy.B)trade policy.C)fiscal policy.D)monetary policy.3)?Which of these is MOST LIKELY to occur after the government increases taxes?A)Annual deficits increase.B)The national debt increases.C)Consumer spending decreases.D)Government programs decrease.4)?Unemployment insurance, Welfare, Medicare, Medicaid, and Social Security are key components ofA)fiscal policy.B)monetary policy.C)supply-side policy.D)wage-price controls.5)?In 2008, many United States families received a tax rebate check from the Internal Revenue Service (IRS). Why were tax rebate checks distributed?A)to stimulate the economyB)to slow down productivityC)to decrease consumer spendingD)to increase the federal income tax6)?Which action would be a change in the government's fiscal policy?A)an increase in taxesB)a decrease in unemploymentC)a decrease in collected revenuesD)an increase in the price of goods7)?The federal government uses government spending and tax rates to help control recessions and encourage economic activity. This is calledA)fiscal policy.B)monetary policy.C)supply-side economics.D)open market operations.8)?The leaders of a small country decide that they need to enact a contractionary fiscal policy. Which action is consistent with this fiscal policy?A)reduce taxesB)lower its discount rateC)reduce government spendingD)lower the price of securities9)?Of the following taxes, what is the name for the taxes that all homeowners must pay?A)Sales TaxB)Income TaxC)Excise TaxD)Property Tax10)?State governments often decide to place a "sin tax" on specific products or goods, like alcohol and tobacco. Which rationale is LEAST LIKELY to encourage governments to adopt a "sin tax"?A)"Sin taxes" encourage people to consume less of a good because it is illegal.B)"Sin taxes" quickly raise funds through indirect taxes affecting users only.C)"Sin taxes" disproportionally affects lower income groups.D)"Sin taxes" generate funding for special projects.11)?Which pairs of operations BEST fit with fiscal policy?A)government spending and taxationB)taxation and open market operationsC)discount rate and government spendingD)open market operations and discount rate12)?Federal program that provides monthly payments (entitlements) to people who are retired or unable to work is calledA)Welfare.B)Medicare.C)Social Security.D)Senior Citizen's program.13)?One of the primary goals of stabilizing the economy is toA)increase income levels.B)maintain low unemployment.C)raise the standard of living.D)increase profits and spending.14)?Fiscal policy affects which two parts of aggregate demand directly?A)Taxes and consumptionB)Consumption and investmentC)Investment and net exportsD)Government spending and consumption15)?Discretionary fiscal policy is defined asA)the arbitrary fluctuation in tax laws and budget requirements.B)the automatic change in certain fiscal instruments when real GDP changes.C)the deliberate manipulation of the money supply to expand the total economy.D)a deliberate change in tax laws and government spending to change equilibrium income.16)?How will a contractionary fiscal policy affect a budget deficit?A)not affect itB)grow the deficitC)shrink the deficitD)change monetary policy17)?What is one way the government CANNOT influence income redistribution?A)Personal Income TaxesB)Public PensionsC)Earned Income Tax CreditD)Open Market Policy18)?Which item is NOT a means to finance government spending?A)money creationB)capital gains taxesC)government subsidiesD)personal income taxes19)?With regards to economic growth, what is the goal of an expansionary fiscal policy?A)to increase trade deficitsB)to increase economic growthC)to decrease economic growthD)to maintain current economic levels20)?What does contractionary fiscal policy do to economic growth?A)it dependsB)increases itC)decreases itD)does not affect it ................
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