Which of the following is considered expansionary fiscal policy?
A) Congress decreases the income tax rate.
B) Legislation increases a college tuition deduction from federal income taxes.
C) The Arizona legislature cuts highway spending to balance its budget.
D) Congress increases defense spending.
A
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Which of the following does not determine the position and shape of a society's PPF?
a. physical resources b. price level c. skills and technology d. past construction of factories and research
Assume a simple macroeconomic model. When inventories rise unexpectedly,
a. income is above its equilibrium value. b. income will rise until it reaches its equilibrium value. c. total spending is higher than total output. d. All of the above.
When exchange rates are flexible, they are
A. Determined by proclamation of the monetary authorities of a country. B. Permitted to vary with changes in supply and demand in the foreign exchange market. C. Determined by the provisions of the Bretton Woods agreement. D. Determined by the relative levels of gold reserves.
If the cyclically-adjusted budget shows a deficit zero and the actual budget shows a deficit of about $150 billion, it can be concluded that there is:
A. Built-in stability B. A cyclical deficit C. An expansionary fiscal policy D. A contractionary fiscal policy