Econ Final Exam Review 2

50. Most billionaires hold their wealth in:

• Stock
• Income
• Property
• Art

51. Which of the following is a significant factor contributing to the growth of the US national debt?

• Decreasing interest rates
• Increasing federal budget surpluses
• Persistent budget deficits
• Decreasing healthcare costs

52. The annual shortfall in government revenues compared to government spending is called what?

• Deficit
• Debt
• Interest
• Crowding out

53. What is “crowding out” in the context of fiscal policy?

• The reduction in private investment due to increased government borrowing and spending
• The increase in consumer spending due to government stimulus
• The decrease in government spending due to high inflation
• The displacement of small businesses by large corporations

54. Which of the following is a potential downside of using fiscal policy during an economic downturn?

• Increasing unemployment
• Crowding out private investment
• Reducing inflation
• Decreasing consumer confidence

55. Which of the following is an example of a supply shock?

• An unexpected drop in consumer spending
• A natural disaster that disrupts production
• An increase in government spending
• A sudden change in tax policy

56. Fiscal policy is generally more effective in addressing which type of economic issue?

• Long-term economic growth
• Short-term downturns in aggregate demand
• Structural unemployment
• Supply-side constraints

57. Which of the following best defines fiscal policy?

• The use of government spending and tax policies to influence economic conditions
• The regulation of interest rates to control inflation
• The management of the money supply by the central bank
• The establishment of laws and regulations to protect consumers

58. Which of the following describes the concept of fiscal policy being "well-targeted"?

• It aims to address specific under-employed resources.
• It focuses on broad, general measures that affect the entire economy.
• It avoids intervention in any specific economic sector.
• It prioritizes long-term projects over immediate needs.

59. Which fiscal policy tool is most likely to have an immediate impact on consumer spending?

• Reducing corporate taxes
• Increasing defense spending
• Expanding long-term infrastructure projects
• Providing direct cash to households