1 What Factors Cause Shifts i C Cheggcom blackboardsanjacedu

(1 What Factors Cause Shifts i C Chegg.com /blackboard.sanjac.edu/webapps/assessment/take/Mlaunch.jsp?course assessment id-466727_18course id 31 I Start Here -201830:319801 QUESTION 1 Much of each year\'s deficit is considered \"uncontrollable\" because: O It must be spent for purchasing goods and services O It is primarily the result of the relative strength or weakness of the economy O It is determined by private spending O Government spending is so large that it is literally out of control. QUESTION 2 The government is pursuing a stimulus policy if, regardless of the budget balance (surplus or deficit), it O Increases its spending and increases taxes O Reduces its spending and reduces taxes O Increases its spending and reduces taxes O Reduces its spending and increases taxes QUESTION 3 Which of the following is NOT an automatic stabilizer? O Income taxes O Unemployment benefits. Welfare payments O National security spending QUESTION 4 Letting automatic stabilizers fix the deficit rather than use fiscal policy might be preferred because O people know fiscal policy might be temporary O fiscal policy might raise interest rates 0 there is little to no time lag O All of the above

Solution

1.

D

Government spending, is of large size, and it cannot be controlled with ease.

2.

C

It happens during the stimulus program as a part of the fiscal policy.

3.

D

It is not about the automatic stabilizers.

4.

D

Automatic stabilizers work without any time lag and does not create the negative effect of crowding out that is with the fiscal policy. Besides fiscal policy is considered as temporary and does not affect consumers.

5.

A

It is the case of today.

6.

A.

With government spending, funds will be sucked out. It will raise the interest rate and borrowing becomes expensive to the firms.

7.

D

It created more of a government goods.

8.

B

As per this theory, people think that in future, tax level will be increased to recover the deficit of today. So, they save more.