Chapter 16,17,18,19

Front

What is an example of contractionary fiscal policy?

Back

increasing taxes

Front

Which of the following is an example of expansionary fiscal policy? Options: increase in taxes, stimulus package, increasing the money supply, lowering interest rates

Back

stimulus package

Front

The use of government's budget tools, government, spending, and taxes to influence the macroeconomy

Back

Fiscal policy

Front

Seeks to counteract business cycle fluctuations

Back

countercyclical fiscal policy

Front

The portion of additional income spent on consumption.

Back

Marginal propensity to consume

Front

To determine the total effect on spending from any initial government expenditures, we use the ____________________.

Back

spending multiplier

Front

Government programs that automatically implement countercyclical fiscal policy in response to economic conditions.

Back

Automatic stabilizers

Front

Which of the following is an example of an automatic stabilizer?

• Federal Reserve interest rates
• discretionary outlays
• progressive income taxes
• education subsidies

Back

progressive income taxes

Front

Occurs when private spending falls in response to increase in government spending.

Back

Crowding-out

Front

Asserts that increases in government spending and decreases in taxes are largely offset by increases in savings.

Back

New classical critique