ECON 200 Chapter 28-29 questions and answers docs 2020 liberty university

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ECON 200 Chapter 28-29 questions and answers docs 2020 liberty university What is a government budget? Monetary policy and fiscal policy are two different tools used by [blank] to influence the e... conomy. Monetary policy concerns using the national [blank] to affect the economy, while fiscal policy uses [blank] and expenditures in the government’s [blank]. Place in chronological order the lag phenomena associated with the use of fiscal policy to smooth business cycles. Match each term to its definition. The income tax was first instituted in [blank]. Prior to that date, most tax revenues were generated by [blank] taxes. The income tax was a progressive system from the start, and the top marginal rate was [blank]. Marginal rates climbed significantly during [blank], and the top rate rose above [blank] during the mid-twentieth century. Government borrowing to fund economy-boosting projects is self-defeating, since crowding-out will completely cancel out the benefits of the policy. Click on the two wedges that represent payroll tax revenue as a share of total U.S. federal government tax revenue in 2014. Which of the following have been proposed as solutions to the funding problem of Social Security and Medicare? In Greece, austerity measures undertaken to bring down the national debt triggered street demonstrations in 2011. How did later events play out? Place the events in sequence to describe how crowding-out happens. What was the centerpiece action of the Economic Stimulus Act of 2008? Mandatory outlays constitute [blank] portion of the U.S. federal budget. They are determined by [blank] and not subject to adjustment during the budget process. This category includes [blank] and Medicare. Which of the following is the correct definition of the new classical critique of fiscal policy? Apply the correct label to each event. Which of the following describes a progressive income tax system? The percentage of the U.S. federal government’s debt owned by foreign entities went [blank] from [blank] in 1990 to [blank] in 2013. It is important to remember, however, that foreign supply in the loanable funds market helps keep interest rates [blank], which benefits domestic [blank]. It is also worth noting that demand for U.S. Treasuries is a sign that other economies beside the United States’s are [blank]. If the marginal propensity to consume is 0.80, what is the total implied increase in economic spending activity from a government stimulus of $100 billion? A 2003 change to Medicare eliminated reimbursement for prescription drugs as one of its benefits. What is the reasoning behind the multiplying effect of government spending? Interest payments are payments made [blank] current owners of [blank]. Because these payments are determined by the level of government [blank] and therefore are [blank] adjustable, they can be considered a type of [blank] payment. Which of the following are demographic reasons why entitlement programs like Social Security make up a larger share of the federal budget now than when they were created? The table below lists some fictional countries. Calculate the debt-to-GDP ratio for each of them, then put them in order of their fiscal condition, worst to best. Numbers are in billions of dollars. Assume a nation is starting with zero national debt. If government outlays and tax revenue are as shown, and the nation’s GDP is $12 billion at the end of Year 3, what is its debt-to-GDP ratio at that time? Round to the nearest whole percent. Both Social Security and Medicare are government programs concentrated on the [blank] population. Social Security is focused on providing [blank], while Medicare provides [blank] for retired persons. For people to receive Social Security and Medicare payments, they must have [blank] the program when they were[blank]. Upon [blank], they become eligible for payouts. Use the following table of marginal tax rates to calculate the average income tax rate, as a percentage of total income, paid by someone earning $500,000. As of 2016, social insurance tax on a typical worker’s income is calculated as [blank] of the worker’s pretax paycheck amount. Only [blank] of that amount is actually deducted from the worker’s paycheck. The other [blank] is paid by the employer. Self-employed individuals, however, must pay the full [blank] themselves. For Social Security, though not for Medicare, the amount of income taxed is capped. The cap for 2016 is [blank]. Drag the labels to classify each category of spending as mandatory or discretionary. Match each U.S. president to the action he took regarding federal income tax rates. The figure shows a drop in aggregate demand that, without government action, will be followed by an increase in aggregate supply. Match each label from the figure to the corresponding description. Use the following table of marginal tax rates to calculate the total income tax paid by someone earning $70,000. Which of the following government actions would be considered fiscal policy decisions? Select the correct definition of publicly held national debt. Classify each scenario according to the type of policy lag it illustrates. Assume the government has established countercyclical fiscal policies to reduce the severity of its economy’s business cycle fluctuations. Click on the periods during which a contractionary fiscal policy is in effect. When the federal government has more [blank] than [blank], it has to borrow money to make up the difference. The borrowing is accomplished by selling [blank] to investors. The federal government borrows from both domestic and foreign investors, though most national debt is held [blank]. Match each major factor responsible for recent changes in federal spending to the correct trend description. Label each scenario on the right with the type of taxes it is subject to. More than one label might match a scenario. As the figure illustrates, the ratio of U.S. workers [blank] Social Security to former workers [blank] it has dropped since 1960 and is projected to drop further. This trend will make it [blank] to sustain Social Security in its present form. Over the last 100 years, marginal tax rates have been fluctuating constantly. Place the years in order by how high the top marginal rate was at the time. Place the year with the highest rate first. Drag the countries into their proper locations on the chart, which shows debt-to-GDP ratios (in percentages) for the year 2013. In the United States, a person’s marginal tax rate is generally higher than the same person’s average tax rate. Assume the economy is currently producing at short-run equilibrium point A. In fear that the economy is expanding beyond its long-run capabilities, government officials decide to raise taxes. Click on the equilibrium point that results from this fiscal policy decision. Place the events in chronological order. Apply the correct description to each policy example. A worker gets a raise of $120 per month and quickly decides to spend $90 of the money on necessities and the occasional luxury, while putting the remaining $30 into retirement savings. Based on this decision, calculate the worker’s marginal propensity to consume, or MPC, as a decimal. Click on the time interval when mandatory spending was at its peak as a percentage of the U.S. federal budget. Select the time frame during which there was a significant budget surplus. What kind of government expenditure is defined as payments made to groups or individuals when no good or service is received in return? The largest U.S. budget deficit since 1960 occurred during the Great Recession. What are the causes of rising government budget deficits when expansionary fiscal policy is used during recessions? Suppose the government has a balanced budget and wants to increase spending without changing tax rates. The government enters the loanable funds market to borrow $150 billion for economic stimulus spending. How much money is available for private investment after this action has shifted the demand curve as shown in the figure? Place the spending categories in order by their share, greatest to least, of the 2014 U.S. federal budget. Which policy tools are considered automatic stabilizers? Fiscal policy is usually intended to influence aggregate demand (AD) rather than short- or long-run aggregate supply (SRAS and LRAS, respectively). Match each proposed solution to the problems of Social Security/Medicare funding with the rationale behind it. Which taxes are payroll taxes? That is, which taxes are normally paid in the form of deductions from a worker’s paycheck? There are times when the government wants to slow down economic growth. [Show More]

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