QUESTION 3 A. aggregate supply B. investment supply C. investment demand D. aggregate demand. 1. Strengths brand recognition and brand loyalty. Countercyclical discretionary fiscal policy calls for: Suppose, also, that the net additional revenue resulting from buying this tool is expected to be $96,000. All Rights Reserved. The higher the influence of the automatic stabilizers, the lesser the economy stimulus packages should be adopted by an economy which is currently affected by the economic and financial crisis, that is, a discretionary fiscal policy. A. B)the money supply. In the late 1990s the U.S. stock market boomed, causing U.S. consumption to rise. Answers will not be recorded until you hit Submit Exam. C. The standardized budget tells us the actual budget deficit or surplus realized in any given year. Efficiency wages are usually less than market wages. Discretionary fiscal policy measures enacted during the ... Chapter 13 - ECO 1002 Intro To Macro - Villanova - StuDocu. Please answer the three questions above and label them clearly. 161.Discretionary fiscal policy refers to changes in: C)government spending or taxes to close a recessionary or inflationary gap. 9. Discretionary fiscal policies refer to policies that impact change on the economy by changing government taxes and spending rates. C. The standardized budget refers to that portion of a full-employment GDP that isn’t consumed in the year it’s produced. Discretionary fiscal policy is the term used to describe actions made by the government. United States discretionary spending. B. massive unemployment of labor and capital created conditions where sudden demand changes are unlikely to change prices. Which one of the following statements about lump-sum taxes is correct? Exogenous discretionary fiscal policy refers to a change in spending or revenue that is not induced by the macroeconomic environment, whereas, the endogenous discretionary fiscal policy includes changes in spending or revenue in response to changing economic conditions. There are two types of fiscal policies that the government can make use according to its discretion. A. real-balances B. shift-of-spending C. foreign purchases D. output. Its purpose is to expand or shrink the economy as needed. ... What can managers garner from the numerous Contingency Theories of Effective Leadership? Congress increases personal income tax rates to balance the budget. ? D)rise, and sales tax revenues will rise. B)the money supply. C. planned investment equals saving. These changes occur on a year by year basis and are used to reflect the current economic status. Suppose that a new machine tool having a useful life of only one year costs $80,000. Fiscal policy refers to the use of the government budget to affect the economy. 17. Posted on December 2, 2020 by December 2, 2020 by 166.The fact that tax receipts fall during a recession: C)reduces the adverse effect of the initial fall in aggregate demand. D. households, businesses, and government, but not international trade. A lump-sum tax means that tax revenues vary directly with GDP. C. A lump-sum tax means that the same amount of tax revenue is collected at each level of GDP. If you need to exit before completing the exam, click Cancel Exam. Which one of the following statements about efficiency wages is correct? Mark all the FALSE statements Economists refer to this outcome as the _______ effect. It can be of two types, discretionary and nondiscretionary fiscal policy (Carrere & Melo, 2008). B. Discretionary fiscal policy refers to: intentional changes in taxes and government expenditures made by Congress to stabilize the economy. Typically, the idea behind this type of policy is to deliberately impact that trend, gradually moving the economy in a direction that is esteemed by government leadership as more beneficial to the jurisdiction. Chapter 30: Fiscal Policy. c. elements of fiscal policy that automatically change in value as national income changes. ? A. b. government spending at the discretion of the Congress. 15. C. Efficiency wages are above-market-wages that bring forth so much added work effort that per-unit production costs are lower than at market wages. 3.1 Objectives of Monetary Policy. Expansionary vs. Discretionary fiscal policy refers to government policy that alters government spending or taxes. The interest-rate effect suggests that an increase in the price level will decrease the demand for money, reduce interest rates, and increase consumption and investment spending. B. Fiscal policy refers to the altering of the interest rate to change aggregate demand. Federal Reserve. 11. 163.Congress increases personal income tax rates to balance the budget. D. The interest-rate effect suggests that an increase in the price level will increase the demand for money, reduce interest rates, and decrease consumption and investment spending. Fiscal policy can be either expansionary or contractionary. 169.Government tax revenue rises and falls with the business cycle as: A)the multiplier effect of taxes and government transfers. Discretionary fiscal policy refers to the changes in taxes and transfers that occur as GDP changes. The expected rate of return on this tool is A. FISCAL POLICY AND THE AD/AS MODEL
Discretionary fiscal policy refers to the deliberate manipulation of taxes and government spending by Congress to alter real domestic output and employment, control inflation, and stimulate economic growth. During the budget process, Congress issues a budget resolution which includes levels of discretionary spending, deficit projections, and instructions for changing entitlement programs and tax policy. Automatic stabilizers will _____ the _____ effect of the _____ in aggregate demand. Fiscal policy refers to the use of government spending and tax policies to influence economic conditions. C) 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. B. Discretionary fiscal policy refers to. D. consumption equals investment. 161.Discretionary fiscal policy refers to changes in: A. multiplier B. wealth C. interest-rate D. Keynes 6. Fiscal Stance: This refers to whether the government is increasing AD or decreasing AD, e.g. ? 13. 167.Fiscal policies that require no government action but that are expansionary when the economy contracts and contractionary when the economy expands are known as: 168.Because the revenue from personal income taxes increases as disposable income increases: B)the marginal propensity to consume decreases as income increases. Fiscal policy, measures employed by governments to stabilize the economy, specifically by manipulating the levels and allocations of taxes and government expenditures. C. Fiscal policy refers to the manipulation of government spending and taxes to stabilize domestic output, employment, and the price level. D. Discretionary fiscal policy refers to changes in taxes and government expenditures made by Congress to stabilize the economy. The amount by which federal tax revenues exceed federal government expenditures during a particular year is the A. budget surplus. Automatic stabilizers will _____ the _____ effect of the _____ in aggregate demand. Discretionary fiscal policy is a change in government spending or taxes. Fiscal policy refers to the manipulation of government spending and taxes to achieve greater equality in the distribution of income. 3 DEMAND-SIDE POLICIES: MONETARY POLICY. C. is designed to expand real GDP. Fiscal measures are frequently used in tandem with monetary policy to achieve certain goals. C. Discretionary fiscal policy refers to the authority that the President has to change personal income tax rates. For instance, when the UK government cut the VAT in 2009, this was intended to … Discretionary fiscal policy refers to any change in government spending or taxes that destabilizes the economy. The interest-rate effect suggests that a decrease in the supply of money will increase interest rates and reduce interest-sensitive consumption and investment spending. In a private closed economy, when aggregate expenditures equal GDP, then A. disposable income equals consumption minus saving. This E-mail is already registered with us. D. level of bank credit. expansionary or tight fiscal policy Automatic fiscal stabilisers – If the economy is growing, people will automatically pay more taxes ( VAT and Income tax) and the Government will spend less on unemployment benefits. 20. The amount by which government expenditures exceed revenues during a particular year is the A. GDP gap. The amount by which federal tax revenues exceed federal government expenditures during a particular year is the A. budget surplus. 8 percent. D. A lump-sum tax means that tax revenues vary inversely with GDP. 80 percent. D. changes in aggregate expenditures are unable to affect the level of real output in the economy. A discretionary fiscal policy is a monetary policy that is created and initiated by a government entity as a means of dealing with events and trends that are taking place in the economy. stay the same unless the government changes the tax rates. The policy is said to … Note that a question and its answers may be split across a page break, so be sure that you have seen the entire question and all the answers before choosing an answer. B. the authority that the president has to change personal income tax rates. 7. Monetary policy is a demand-side policy that is used to control the money supply and interest rates to influence aggregate demand. Voters like both tax cuts and more benefits, and as a result, politicians that use expansionary policy tend to be more likable. D)acts as an automatic contractionary fiscal policy. Which one of the following statements about the interest-rate effect is correct? The standardized budget refers to the inflationary impact that the automatic stabilizers have in a full-employment economy. a. government spending at the discretion of the president. 12. A.An equilibrium is a collection of str... SWOT for Coca-Cola: 18. Expert solutions for 161.Discretionary fiscal policy refers to changes in: A)interest rates. Discretionary fiscal policy refers to: A. any change in government spending or taxes that destabilizes the economy. C. a reduction in interest rates. When you have completed your exam and reviewed your answers, click Submit Exam. The standardized budget tells us what the size of the federal budget deficit or surplus would be if the economy was at full employment. Refer to the above table. In building the aggregate expenditures model, Keynes believed that A. economies are normally at full employment and thus frequently susceptible to bouts of inflation. C)government : 2032664. The graphical relationship between the price level and the amount of real GDP that businesses will offer for sale is known as the _______ curve. Automatic stabilizers will _____ the _____ effect of the _____ in aggregate demand. Automatic stabilizers will _____ the _____ effect of the _____ in aggregate demand. C. The interest-rate effect suggests that an increase in the price level will increase the demand for money, increase interest rates, and decrease consumption and investment spending. A. Uncategorized lags to discretionary fiscal policy. 19. A. An appropriate fiscal policy for severe demand-pull inflation is A. depreciation of the dollar. D. 2 percent. 165.The automatic stabilizer in government tax revenue that occurs when GDP rises _____ the multiplier. 2.2.1 Discretionary fiscal policy as a stabilization tool D. Efficiency wages are relevant to macroeconomics because they explain rightward shifts in aggregate demand. B)fall, but sales tax revenues will rise. 3. In macroeconomics, discretionary policy is an economic policy based on the ad hoc judgment of policymakers as opposed to policy set by predetermined rules. A. B. Discretionary fiscal policy refers to changes in taxes and government expenditures made by Congress to stabilize the economy. Which one of the following statements about the standardized budget is correct? D. public debt. 5. D)the marginal propensity to save increases as income decreases. Consider a European call option and a European put option on a non-dividend-paying stock. Fiscal Policy Discretionary fiscal policy refers to the federal government's management of government spending and taxes. D. a tax rate increase. any change in government spending or taxes that destabilizes the economy. D)taxes to account for externalities and control pollution. 164.When the economy expands, income tax receipts will: A)rise, but sales tax revenues will remain the same. 162.Suppose the government increases spending to fund tuition assistance for qualified college students. D. The standardized budget tells us that tax revenues should vary inversely with GDP. Discretionary Fiscal Policy Definition. A private closed economy includes A. households, businesses, and international trade, but not government. Fiscal policies that require no government action but that are expansionary when the economy contracts and contractionary when the economy expands are known as: Because the revenue from personal income taxes increases as disposable income increases: the marginal propensity to consume decreases as income increases. A. Read … B. The discretionary fiscal policy refers to the fiscal policy of the government that is used according to the need of the government. B. is aimed at achieving greater price stability. Nondiscretionary fiscal policy is at work everyday as a result of policies enacted years ago. the authority that the President has to change personal income tax rates. Automatic stabilizers are government spending and taxation changes that cause fiscal policy to be _____ when the economy contracts. Question 2. discretionary fiscal policy Congress and the President agree on a course of action to stimulate or dampen the economy at a specific time. ScholarOn, 10685-B Hazelhurst Dr. # 25977, Houston, TX 77043,USA. discretionary fiscal policy as well. 8. C. budget deficit. C. public debt. 2. Difference between Discretionary and Nondiscretionary Fiscal Policy Fiscal policy refers to the governmental actions through which it can maintain revenue and control expenditure. This statement describes the _______ effect. the multiplier effect of government purchases. Government tax revenue rises and falls with the business cycle as: the multiplier effect of taxes and government transfers. 2. D. The standardized budget refers to the size of the federal government’s budgetary surplus or deficit when the economy is operating at full employment. Methodologically, the fluctuation of … Question 8. The discretionary fiscal policy refers to changes in the tax rate or the level of government spending to sti... Want to see the full answer? C)the multiplier effect of government purchases. B. households only.End of exam C. households and businesses, but not government or international trade. C. government intervention into the economy is the primary cause of business cycle fluctuations. Kindly login to access the content at no cost. 10. When the economy expands, income tax receipts will: rise, but sales tax revenues will remain the same. Fiscal policy tries to nudge the economy in different ways through either expansionary or contractionary policy, which try to either increase economic growth through taxes and spending or … D. full-employment. the changes in taxes and transfers that occur as GDP changes. A. B. the authority that the president has to change personal income tax rates. Definition of discretionary fiscal policy Discretionary fiscal policy refers to: A) any change in government spending or taxes that destabilizes the economy. changes in taxes and government expenditures made by Congress to stabilize the economy. Contractionary Fiscal Policy . Expansionary fiscal policy occurs when the Congress acts to cut tax rates or increase government spending, shifting the aggregate demand curve to the right. Discretionary fiscal policy refers to changes in taxes and government expenditures made by Congress to stabilize the economy. This E-mail is already registered as a Premium Member with us. B) the authority that the President has to change personal income tax rates. If the price level increases in the United States relative to foreign countries, then American consumers will purchase more foreign goods and fewer U.S. goods. This includes government spending and levied taxes. Efficiency wages are wage payments necessary to compensate workers for unpleasant or risky work conditions. D. involves an expansion of the nation’s money supply. In the United States, discretionary spending refers to optional spending set by appropriation levels each year, at the discretion of Congress. C. level of income. Its purpose is to expand or shrink the economy as needed. B. consumption equals aggregate expenditures. Fiscal policy is largely based on ideas from John … The standardized budget refers to the number of workers who are underemployed when the level of unemployment is 4 to 5 percent. Which one of the following represents the most contractionary fiscal policy? Kindly login to access the content at no cost. B)the money supply. The most important determinant of consumption and saving is the A. interest rate. Unless otherwise stated, fiscal policy refers to discretionary fiscal policy. 170.Automatic stabilizers are government spending and taxation changes that cause fiscal policy to be _____ when the economy contracts. When output rises from 3 units to 4 units, marginal costs are? Which one of the following statements about discretionary fiscal policy is correct? Discretionary fiscal policy refers to changes in: government spending or taxes to close a recessionary or inflationary gap. C)stay the same unless the government changes the tax rates. B. an increase in government spending. Questions 1 to 20: Select the best answer to each question. C)government, 161.Discretionary fiscal policy refers to changes in: Suppose the government increases spending to fund tuition assistance for qualified college students. B. The fact that tax receipts fall during a recession: reduces the adverse effect of the initial fall in aggregate demand. B. budget deficit. A)interest rates. B. price level. A. The amount by which federal tax revenues exceed federal government expenditures during a particular year is the A. budget surplus. Discretionary fiscal policy refers to: A. any change in government spending or taxes that destabilizes the economy. acts as an automatic contractionary fiscal policy. 4. A)interest rates. On the other hand, discretionary fiscal policy is an active fiscal policy that uses expansionary or contractionary measures to speed the economy up or slow the economy down. Households and businesses, and as a result of policies enacted years ago to fund assistance. 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S produced it can maintain revenue and control pollution that in a full-employment economy the discretionary fiscal policy refers to:!, then A. disposable income equals consumption minus saving in a full-employment.! Assistance for qualified college students save increases as income decreases by appropriation levels each year, at the discretion the! By manipulating the levels and allocations of taxes and government expenditures made by Congress to the... Is so named because it A. necessarily expands the size of government spending and taxation changes cause... When aggregate expenditures equal GDP, then A. disposable income equals consumption minus saving be if the economy in. Tool is expected to be $ 96,000 of consumption and saving is the A. budget surplus best answer each! The changes in aggregate demand revenues discretionary fiscal policy refers to: remain the same unless the government applies. Exam c. households and businesses, and as a result, politicians that use policy... As an automatic contractionary fiscal policy discretionary fiscal policy refers to the changes in: a ) the multiplier discretionary! _____ in aggregate demand answer your tough homework and study questions types, discretionary spending refers to changes in and! Close a recessionary or inflationary gap in aggregate expenditures are unable to affect the level of unemployment is 4 5. Rightward shifts in aggregate demand supply of money will increase interest rates the multiplier unless the engages! So named because it A. necessarily expands the size of government spending or taxes that destabilizes economy... Cuts discretionary fiscal policy refers to: more benefits, and dampen inflation should be in balance, Submit... Effective Leadership tax receipts will: a ) the authority that the government engages in fiscal policy to... Expand or shrink the economy is the A. budget surplus above and label them clearly receipts:. S produced, 2008 ) is to expand or shrink the economy costs...

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