Question : 31) If the economy has a structural deficit of $25 : 1240648

31) If the economy has a structural deficit of $25 billion and a cyclical deficit of $75, we can conclude that the current budget deficit is ________ billion.

A) $0

B) $25

C) $50

D) $75

E) $100

32) Discretionary fiscal policy is defined as fiscal policy

A) left to the discretion of military authorities.

B) initiated by an act of Congress.

C) initiated by a Presidential proclamation.

D) triggered by the state of the economy.

E) with multiplier effects.

33) In 2009, Congress passed tax laws to reduce income tax rates for some taxpayers. This action is called

A) a discretionary fiscal policy.

B) a discretionary revenue policy.

C) an automatic fiscal policy.

D) an annual tax policy.

E) induced tax policy.

34) Discretionary fiscal policy is a fiscal policy action, such as

A) an interest rate cut, initiated by an act of Congress.

B) an increase in payments to the unemployed, initiated by the state of the economy.

C) a tax cut, initiated by an act of Congress.

D) a decrease in tax receipts, initiated by the state of the economy.

E) an increase in the quantity of money.

35) The government expenditure multiplier is used to determine the

A) extra scrutiny government action receives.

B) amount aggregate demand is affected by a change in government expenditure.

C) amount aggregate supply is affected by a change in government expenditure.

D) amount private consumption is decreased by government expenditure.

E) extent to which automatic stabilizers must be changed in order to avoid recessions.

36) The magnitude of the government expenditure multiplier is ________ the magnitude of the tax multiplier.

A) greater than

B) equal to

C) less than

D) not comparable to

E) greater than for expansionary policy and less than for contractionary policy

37) If government expenditures on goods and services increases by $20 billion, then aggregate demand

A) increases by $20 billion.

B) increases by more than $20 billion.

C) decreases by $20 billion.

D) decreases by more than $20 billion.

E) increases by less than $20 billion.

38) If government expenditure on goods and services increase by $100 billion, then aggregate demand

A) increases by $100 billion.

B) increases by less than $100 billion.

C) increases by more than $100 billion.

D) remains unchanged.

E) decreases by more than $100 billion.

39) A $100 million decrease in government expenditure on goods and services leads to an even larger decrease in aggregate demand because of

A) induced changes in consumption expenditures.

B) automatic fiscal policy.

C) induced changes in aggregate supply.

D) discretionary fiscal policy.

E) the reinforcing effect of monetary policy.

40) If government expenditure on goods and services increase by $10 billion, then aggregate demand

A) increases by $10 billion.

B) increases by $10 billion multiplied by the government expenditure multiplier.

C) increases by $10 billion multiplied by the tax multiplier.

D) decreases by $10 billion.

E) decreases by $10 billion multiplied by the government expenditure multiplier.