Question

QUESTION 14

1. Changes in government spending and/or taxes as the result of legislation is called

   		open market operations of the Federal Reserve
   		fiscal policy
   		balanced budget operations
   		monetary policy

QUESTION 15

1. Contractionary fiscal policy is deliberate government action to influence aggregate demand and the level of real GDP through

   		expanding and contracting the money supply
   		encouraging business to expand or contract investment
   		regulating net exports.
   		decreasing government spending or increasing taxes

QUESTION 16

1. Expansionary fiscal policy consists of

   		increasing government spending.
   		increasing payroll taxes to finance health care
   		decreasing government spending
   		raising the minimum wage

QUESTION 17

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

   		countercyclical policy
   		fiscal policy
   		monetary policy
   		a balanced budget.
   		presidential discretion

QUESTION 18

1. The government is pursuing an expansionary policy if it:

   		decreases its spending and increases its tax revenues
   		increases its spending or increases its tax revenues
   		decreases its spending or reduces its tax revenues
   		increases its spending and/or reduces its tax revenues

Answer 1

Ans 14:

fiscal policy

(The fiscal policy is the policy of the government which is related to government spending and taxation)

Ans 15: decreasing government spending or increasing taxes

(In contractionary fiscal policy, government reduces expenditure or increases taxes or uses a combination of both. It is used in the times of boom)

Ans 16:

increasing government spending.

(In expansionary fiscal policy, government increases the spending or reduces the taxes or uses a combination of both. It is generally used in the time of recession to boost aggregate demand).

Ans 17: fiscal policy (It is a policy which is related to government spending and taxation)

Ans 18: increases its spending and/or reduces its tax revenues (expansionary fiscal policy consists of increase in government spending or reduction in taxes or a combination of both).