Crowding out is the tendency for increased government deficits to:
A. increase investment spending.
B. reduce consumption spending.
C. increase consumption spending.
D. reduce investment spending.
Answer: D
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In January 2009, the President submitted a bill to Congress in order to stimulate the economy and increase employment. The legislation was passed in March 2009, and the spending occurred from June 2009 to March 2011. As a result
A) the full effect of the fiscal policy change would not be felt until after March 2011 because of the effect time lag. B) the full effect of the fiscal policy change would not be felt until after March 2011 because of the recognition time lag. C) the full effect of the fiscal policy change would be felt by March 2011 because people anticipated the spending and changed their behavior accordingly. D) the full effect of the fiscal policy change would be felt when the last of the funds were spent by the government.
A tax imposed at every stage of production is a
a. value-added tax. b. lump sum tax. c. corrective tax. d. regressive tax.
Discretionary policy calls for continual adjustments to the money supply and is associated with the monetarist perspective.
a. true b. false
If giving to public goods is subsidized through deductions under a progressive income tax, the government subsidizes public goods consumed by higher income individuals at greater rates than public goods consumed by lower income individuals.
Answer the following statement true (T) or false (F)