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Expansionary fiscal policy is so named because it:
 
(i) involves an expansion of the nation's money supply.
(ii) necessarily expands the size of government. 
(iii) is designed to expand real GDP.
(iv) is aimed at achieving greater price stability.

 

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Bunny Greenfelder
Bunny GreenfelderLv2
24 Feb 2020
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Related questions

Fiscal policy is carried out primarily by

A) the Federal government.

B) state and local governments working together.

C) state governments alone.

D) local governments alone.

 

Fiscal policy refers to the:

A) manipulation of government spending and taxes to stabilize domestic output, employment, and the price level.

B) manipulation of government spending and taxes to achieve greater equality in the distribution of income.

C) altering the interest rate to change aggregate demand.

D) fact that equal increases in government spending and taxation will be contractionary. 

 

Expansionary fiscal policy is so named because it:

A) involves an expansion of the nation's money supply.

B) necessarily expands the size of government.

C) is aimed at achieving greater price stability.

D) is designed to expand real GDP.

 

An appropriate fiscal policy for severe demand-pull inflation is:

A) an increase in government spending.

B) depreciation of the dollar.

C) a reduction in interest rates.

D) a tax rate increase. 

 

29. The amount by which government expenditures exceed revenues during a particular year is the:

A) public debt.

B) budget deficit.

C) full-employment.

D) GDP gap.

 

30. If actual GDP is greater than potential GDP, we have

A) a negative GDP gap

B) a positive GDP gap

C) minimum GDP gap

D) maximum GDP gap 

 

31. Money functions as:

A) a store of value.

B) a unit of account.

C) a medium of exchange

D) all of the choices 

 

 

1. Discretionary fiscal policy refers to:

A. Any change in government spending or taxes that destabilizes the economy.

B. The authority that the President has to change personal income tax rates.

C. Intentional changes in taxes and government expenditures made by Congress to stabilize the economy.

D. The changes in taxes and transfers that occur as GDP changes.

 

2. Countercyclical discretionary fiscal policy calls for:

A. Surpluses during recessions and deficits during periods of demand-pull inflation.

B. Deficits during recessions and surpluses during periods of demand-pull inflation.

C. Surpluses during both recessions and periods of demand-pull inflation.

D. Deficits during both recessions and periods of demand-pull inflation.

 

3. Contractionary fiscal policy is so named because of it:

A. Involves a contraction of the nation's money supply.

B. Necessarily reduces the size of government.

C. Is aimed at reducing aggregate demand and thus achieving price stability.

D. Is expressly designed to expand real GDP.

 

1. Which of the following are examples of expansionary monetary policy?

increase discount rate

decrease reserve requirement

buy bonds

sell bonds
I and III only
II and III only
I and IV only
II and IV only
I, II, and III only
2. The discount rate is
the rate the Fed charges member banks to borrow money.
set directly by the Fed through monetary policy.
the rate banks charge each other to borrow money.
set directly by the Fed through fiscal policy.

the rate banks charge their best customers to borrow money.
3. If during an economic expansion, U.S. financial investors begin to buy stocks increasing the demand for money, what action could the Federal Reserve take to prevent inflation in the economy?
Increase the discount rate
Decrease the discount rate
Buy bonds on the open market
Decrease the required reserve ratio
Extend credit to overseas markets

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