An increase in tax rates as a result of a new tax law passed by Congress is an example of? ___________
A. increasing the government deficit
B. increasing the government debt
C. discretionary fiscal policy
D. needs?tested taxing change.
Answer: C. discretionary fiscal policy
Explanation: An increase in tax rates as a result of a new tax law passed by Congress is an example of discretionary fiscal policy.
Discretionary fiscal policy refers to the deliberate changes in the government expenditures and taxes to influence the GDP.
This type of fiscal policy is usually undertaken to combat certain economic eventse like the economic turbulences and recession.
This fiscal policy is used by the government to either shrink or expand the economy as needed.
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Why is a production possibilities frontier bowed out (concave)?
A) The bowed shape reflects constant opportunity cost. B) The bowed shape reflects decreasing opportunity cost. C) The bowed shape indicates that opportunity cost at first decreases at a decreasing rate, and then begins to decrease at an increasing rate. D) The bowed shape indicates that opportunity cost at first increases at a decreasing rate, and then begins to increase at an increasing rate. E) The bowed shape reflects increasing opportunity cost.
The Fed believes there are three advantages to using the personal consumption expenditures (PCE) price index instead of the CPI as a measure of inflation. These advantages include all of the following except
A) the PCE is a chain-type index as opposed to the market-basket approach used for the CPI, and the market-basket approach tends to overstate inflation. B) the PCE includes the prices of more goods and services than the CPI, so it is a broader measure of inflation. C) the PCE allows the Fed to better track historical trends in inflation than does the CPI because PCE values can be recalculated as new data becomes available. D) the PCE includes the value of imported products purchased by consumers , whereas the CPI does not, and imports make up a growing portion of consumer purchases in the United States.
If V = 10, Q = 4,000, M = 800, then P
A. is 2. B. is 4. C. is 20. D. is 40.
In 2018, expected inflation exceeded inflation. In 2019, inflation exceeded expected inflation. Therefore the real interest rate was ________ than the expected real interest rate in 2018 and the real interest rate was ________ than the expected real interest rate in 2019.
A. less; greater B. greater; greater C. greater; less D. less; less