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