Which of the following is a base on which taxes are levied in the United States?
A. property
B. income
C. sales
D. all of the above
Answer: D
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Starting from long-run equilibrium, a large decrease in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; lower; potential B. expansionary; higher; potential C. recessionary; lower; potential D. recessionary; lower; lower
When the federal government uses taxation and purchasing actions to stimulate the economy it is conducting
A. monetary policy. B. fiscal policy. C. employment policy. D. incomes policy.
If the government ran a major budget deficit, and there was no noticeable effect on the level of GDP, this could be taken as evidence of
a. Laffer curve effect. b. structural deficit. c. crowding-out. d. monetary policy ineffectiveness.
Refer to Scenario 1. Immediately following Sheila's $100,000 deposit into her checking account, Perez Bank
A) has no excess reserves. B) has $10,000 in excess reserves. C) has $90,000 in excess reserves. D) has $100,000 in excess reserves.