Chapter 16,17,18,19 (edited)

Front

Contractionary fiscal policy occurs when the

Back

government decreases spending or increases taxes to slow economic expansion

Front

Which of the following is an example of expansionary fiscal policy?

Back

reducing taxes on corporations

Front

If the economy began to fall into a recession, one would expect Congress and the President to conduct a(n) __________________ policy.

Back

expansionary fiscal

Front

The goal of expansionary fiscal policy is to shift the ____________ curve to the ____________.

Back

aggregate demand; right

Front

Fiscal policy is the use of

Back

budgeting, spending, and taxes to influence the economy

Front

Countercyclical fiscal policy seeks to

Back

minimize business-cycle fluctuations

Front

A person's marginal propensity to consume is the

Back

fraction of an added unit of income that is spent on consumption

Front

An initial increase in government spending of $100 billion can create more than $100 billion of spending throughout the economy by what economists call the _____________ effect.

Back

multiplier

Front

Formula for the spending multiplier given MPC (marginal propensity to consume).

Back

1/(1 - MPC)

Front

If the marginal propensity to consume is equal to 0.6, the spending multiplier is equal to

Back

2.50