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Fiscal Policy Scenarios Flashcards | StudBud
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Fiscal Policy Scenarios
Fiscal Policy Scenarios
20 terms
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StudBud Administration
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1,022 plays
Let's see how much you've learned about Fiscal Policy!
Flashcards
20 cards
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Practice quiz
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Host live
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Questions
20
Answers
1
Bank failures: banks are closing & unemployment is rising, inflation is down & could deflate
Neutral Policy: do nothing
All of these
Expansionary Policy: Taxes down, Spending up
Contractionary Policy: Spending down and Taxes up
2
Best Fiscal Policy for Stagflation: high inflation, high unemployment, GDP down?
Contractionary Policy: Spending down and Taxes up
Expansionary Policy: Spending up and Taxes Down
All of these
Neutral Policy: Balanced Budget
3
Why is Keynesian Policy not sustainable?
It creates deficits and debt
None of these
It causes a ripple or domino effect
It doesn’t allow the economy to fix itself
4
What is the downside of Supply-side?
It cures stagflation
It assumes the rich will invest
Government programs get more money
All of these
5
What is Keynesian Economics?
The belief that Gov't should play a role in the Economy
The belief that Gov't should not play a role in the Economy
The Economic Theory of Keys
None of these
6
Best Fiscal Policy: Economy on the rise: GDP up, CPI up, Unemployment down?
Neutral Policy: Taxes and Spending remain the same
None of these
Contractionary Policy: Taxes up and spending down
Expansionary Policy: Taxes down and Spending Up
7
How is supply-side implemented?
All of these
Reduce taxes
Reduce Spending
Reduce regulations
8
What lesson did I want you to learn from watching the Penny Ice Creamery video?
That Fiscal Policy works
That Fiscal Policy impacts lots of people at once
9
What is Classical Economics?
Like Classical Music, only about Economics
Adam Smith said Gov't shouldn't be involved in the Economy
Keynes said the Government should be involved in the Economy
None of these
10
How does one enact Expansionary Policy?
Balanced Budget: Taxes and Spending are Equal
Surplus Budget: Raise Taxes and Lower Spending
None of the These
Budget Deficit: Lower Taxes and Raise Spending
11
What is Supply Side policy?
All of these
It can be effective against stagflation
It aims to impact aggregate supply
It seeks to shrink Gov't and be more sustainable
12
What is Contractionary Policy?
Surplus Budget: Spending down and Taxes up
None of these
Balanced Budget: Taxes and Spending are Equal
Deficit Budget: Spending up and taxes down
13
Best Fiscal Policy for a Recession: low inflation, high unemployment, GDP down?
None of the These
Expansionary Policy
Neutral Policy
Contractionary Policy
14
Best Fiscal Policy for an Inflationary economy: high inflation, low unemployment, rising GDP?
Expansionary
None of the These
Neutral
Contractionary
15
Which Fiscal Policy for a stable economy low inflation, low unemployment, mild GDP growth?
Neutral Policy
Expansionary Policy
Contractionary Policy
None of the These
16
Which of these is not a problem of using Fiscal Policy?
It stabilizes the business cycle
It can cut programs that people rely on
It has an inside lag (delay of implementation)
It has a crowding out effect on private investment
17
Hyperinflation: Inflation is at record levels! Yikes!
Neutral Policy: Balanced Budget
All of these
Expansionary Policy: Taxes down and spending up
Contractionary Policy: Spending down and taxes up
18
What is Neutral Fiscal Policy?
All of the These
Balanced Budget: Taxes and Spending are equal
Budget Deficit: Lower Taxes and Raise Spending
Surplus Budget: Raise Taxes and Lower Spending
19
When a budget has more spending than it has tax revenue, this is called:
Surplus
Crazy
Deficit
Balanced
20
Fiscal Policy for: Deflationary economy: CPI down, a lot, high unemployment, GDP dropping?
None of these
Contractionary Policy: Taxes up and Spending down
Expansionary Policy: Spending up and Taxes down
Neutral Policy: Balanced budget
