An economist who favored expanded government would recommend:
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tax cuts during recession and tax increases during inflation. |
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tax increases during recession and tax cuts during inflation. |
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tax cuts during recession and reductions in government spending during inflation. |
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increases in government spending during recession and tax increases during inflation. |
When current government expenditures exceed current tax revenues and the economy is achieving full employment:
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the cyclically adjusted budget has a surplus. |
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fiscal policy is contractionary. |
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the cyclically adjusted budget has a deficit. |
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the cyclically adjusted budget has neither a deficit nor a surplus. |
An appropriate fiscal policy for severe demand-pull inflation is:
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a tax rate increase. |
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a reduction in interest rates. |
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an increase in government spending. |
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depreciation of the dollar. |
Suppose the government cuts taxes to keep the economy’s cyclically adjusted budget in balance when the economy is expanding. The government is engaging in a(n):
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neutral fiscal policy. |
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low-interest-rate policy. |
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expansionary fiscal policy. |
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contractionary fiscal policy. |
The public debt is held as:
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Treasury bills, Treasury notes, Treasury bonds, and U.S. savings bonds. |
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U.S. securities, corporate bonds, and common stock. |
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Federal Reserve Notes. |
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U.S. gold certificates. |
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