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Aggregate Supply and Demand & Fiscal Policy Flashcards | StudBud
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Aggregate Supply and Demand & Fiscal Policy
Aggregate Supply and Demand & Fiscal Policy
15 terms
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StudBud Administration
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215 plays
Review for AS/AD and Fiscal policy
Flashcards
15 cards
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Practice quiz
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Questions
15
Answers
1
What shifts Aggegate Demand?
I+G+T+C
G+C+T+Xn
C+I+G+Xn
R+C+G+Xn
2
What is the average acceptable rate of Inflation in the US?
5 - 6%
2-3%
1-2%
7-8%
3
Spending and Taxes are two categories of what policy?
executive
monetary
fiscal
economic
4
When the economy experiences an inflationary gap, the unemployment rate will fall...
below the current PL
Below nominal wage
below potential GDP
Below the natural rate
5
Investment demand increases as a result of ....
businesses becoming more optimistic about the future
increased interest rates
actual +planned inventories
Actual inventories
6
The score that I have PREPARED myself to make on the test tomorrow is
0
75
100
50
7
What will shift this graph back to equilibrium? Elisha
lower taxes and increase spending
increase taxes and lower spending
technological advance
nothing
8
What type of fiscal policy is needed to repair Stagflation?
None
Discretionary
Contractionary
Expansionary
9
To close an inflationary gap the govt. could ____ spending or _____ taxes on consumers.
Decrease; decrease
Decrease; Increase
Increase; increase
Increase: decrease
10
Expansionary policies ____taxes and _____spending
↑↑
↓↓
↑↓
↓↑
11
What happens to Govt. spending and taxes in expansionary fiscal policy?
↑Taxes,↑Govt. spending
↑govt. spending, ↑Taxes
↑Govt. spending, ↓Taxes
↑Taxes
12
What is crowding out?
result of contractionary fiscal policy
Result of expansionary fiscal policy
results of congressional acts
Result of expansionary fiscal policy when govt. borrows $
13
Which results in a budget surplus
Government spending
Expansionary fiscal policy
Unplanned inventory
Contractionary fiscal policy
14
What is the Y-axis of the AS/AD curve?
PL
GDP
P
RGDP
15
How do you get the equilibrium back to full employment when there is inflation?
Increase Taxes
Increase consumption
Increase Govt. Spending
Decrease Taxes
