Which Of The Following Would Be Classified As Fiscal Policy

Question: Fiscal policy refers to changes in

Answer: federal taxes and purchases that are intended to achieve macroeconomic policy objectives.

Question: Which of the following would be classified as fiscal​ policy?

Answer: The federal government cuts taxes to stimulate the economy.

Question: Automatic stabilizers refer to

Answer: government spending and taxes that automatically increase or decrease along with the business cycle.

Question: The increase in the amount the government collects in taxes when the economy expands and the decrease in the amount the government collects in taxes when the economy goes into a recession is an example of

Answer: automatic stabilizers.

Question: The increase in government spending on unemployment insurance payments to workers who lose their jobs during a recession and the decrease in government spending on unemployment insurance payments to workers during an expansion is an example of

Answer: automatic stabilizers.

Question: The largest and fastest-growing category of federal government expenditures is

Answer: transfer payments.

Question: From the 1960s to​ 2014, transfer payments

Answer: have risen from 25 percent to about 48 percent of federal government expenditures.

Question: The three categories of federal government​ expenditures, in addition to government​ purchases, are

Answer: interest on the national​ debt, grants to state and local​ governments, and transfer payments.

Question: The largest source of federal government revenue in 2014 was

Answer: individual income taxes.

Question: Fiscal policy is defined as changes in federal​ ________ and​ ________ to achieve macroeconomic objectives such as price​ stability, high rates of economic​ growth, and high employment.

Answer: taxes; expenditures