Question : 11) A Constitutional amendment requiring that the federal government budget : 1381221

 

11) A Constitutional amendment requiring that the federal government budget be balanced annually would have

A) an automatic stabilizing impact upon the economy.

B) an automatic destabilizing impact upon the economy.

C) overall neutral impact upon the economy.

D) overall positive impact upon the economy during any stage of a business cycle.

 

12) While targeting the deficit, which of the following is likely to occur after a positive aggregate demand shock?

A) AD↑ ⇒ Y↓ ⇒ T↓ ⇒ deficit↑ ⇒ G↓ ⇒ AD↓ ⇒ Y↓

B) AD↑ ⇒ Y↓ ⇒ T↓ ⇒ deficit↓ ⇒ G↓ ⇒ AD↓ ⇒ Y↓

C) AD↓ ⇒ Y↓ ⇒ T↓ ⇒ deficit↑ ⇒ G↓ ⇒ AD↓ ⇒ Y↑

D) AD↑ ⇒ Y↑ ⇒ T↑ ⇒ deficit↓ ⇒ G↑ ⇒ AD↑ ⇒ Y↑

13) While targeting the deficit, which of the following is likely to occur after a negative aggregate demand shock?

A) AD↓ ⇒ Y↓ ⇒ T↓ ⇒ deficit↑ ⇒ G↓ ⇒ AD↓ ⇒ Y↓

B) AD↓ ⇒ Y↓ ⇒ T↓ ⇒ deficit↑ ⇒ G↑ ⇒ AD↑ ⇒ Y↑

C) AD↓ ⇒ Y↓ ⇒ T↓ ⇒ deficit↑ ⇒ G↓ ⇒ AD↑ ⇒ Y↑

D) AD↓ ⇒ Y↓ ⇒ T↑ ⇒ deficit↑ ⇒ G↑ ⇒ AD↓ ⇒ Y↓

 

14) Without targeting the deficit, which of the following is likely to occur after a negative aggregate demand shock?

A) Y↓ ⇒ T↓ ⇒ deficit↑ ⇒ G↓ ⇒ AD↑ ⇒ Y↑

B) Y↓ ⇒ T↓ ⇒ deficit↑

C) Y↓ ⇒ T↓ ⇒ deficit↑ ⇒ G↓ ⇒ AD↓ ⇒ Y↓

D) Y↓ ⇒ T↓ ⇒ deficit↓

 

15) The adverse impact of a negative aggregate demand shock is reduced when the government does not target the deficit because

A) targeting the deficit causes further negative aggregate demand shocks.

B) negative aggregate demand shocks do not affect the deficit.

C) the economy is always producing potential output.

D) not targeting the deficit causes positive aggregate demand shocks.

 

16) The economic impact of ________ during expansionary periods is to moderate growth.

A) implementation lags

B) positive demand shocks

C) automatic stabilizers

D) tax cuts

17) The economic impact of automatic stabilizers during recessionary periods is to

A) have no impact on the recession.

B) moderate the recession.

C) make the recession worse.

D) increase taxes.

 

18) The economic impact of automatic stabilizers during inflationary periods is to

A) accelerate inflationary pressures.

B) increase exports.

C) have no impact on inflation.

D) moderate inflationary pressures.

 

19) The economic impact of ________ during recessionary periods is to decrease taxes.

A) negative demand shocks

B) automatic stabilizers

C) recognition lags

D) increasing the reserve rate

 

20) The economic impact of automatic stabilizers during recessionary periods is to

A) increase unemployment.

B) increase taxes.

C) increase government spending.

D) decrease money growth.

21) Government spending rising during a recession is an example of

A) an automatic destabilizer.

B) an automatic stabilizer.

C) discretionary economic policy.

D) policy lags.

 

22) An example of automatic stabilizers is

A) government spending rising in a recession.

B) taxes rising in a recession.

C) taxes falling in an expansion.

D) all of the above

 

23) An example of automatic stabilizers is

A) government spending rising during an expansion.

B) government spending falling during a recession.

C) taxes rising in an expansion.

D) deficit targeting.