Unit 4 - Fiscal Policy

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A government spending and taxation policy to achieve macroeconomic goals is known as:

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fiscal policy.

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When the federal government is running a budget deficit:

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government expenditures exceed government tax revenues.

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To combat a recession, fiscal policy recommends: an increase in government spending.

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an increase in government spending.

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If the economy was about to enter a period of inflation, which of the following would be the most appropriate policy? A tax increase. A increase in government spending and decrease in taxes. An increase in government spending. A tax decrease.

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A tax increase.

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An expansionary fiscal policy may include: increases in government spending, discretionary increases in transfer payments, reductions in taxes.

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All of these.

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Unemployment compensation is an example of a(n):

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automatic stabilizer.

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To help combat inflation, the government could: run budget deficits, decrease taxes, increase government spending, run budget surpluses.

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run budget surpluses.

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Which of the following categories accounted for the largest percentage of total federal government expenditures in recent years? Income security., National defense., Education and health., Interest on the national debt.

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Income security.

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Which of the following taxes contributed the greatest percentage of total federal government tax revenues in recent years? Individual income taxes., Corporate income taxes., Social Security taxes., Excise taxes.

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Individual income taxes.

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When a tax is regressive, as a person's income rises, the tax rate:

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decreases.