D)the marginal propensity to save increases as income decreases. Fiscal policies that require no government action but that are expansionary when the economy contracts and contractionary when the economy expands are known as: Because the revenue from personal income taxes increases as disposable income increases: the marginal propensity to consume decreases as income increases. Discretionary fiscal policy refers to government policy that alters government spending or taxes. Discretionary fiscal policy refers to changes in taxes and government expenditures made by Congress to stabilize the economy. Question 8. The importance of developing forecasts of the business environment. 162.Suppose the government increases spending to fund tuition assistance for qualified college students. c. elements of fiscal policy that automatically change in value as national income changes. Kindly login to access the content at no cost. A. C. Fiscal policy refers to the manipulation of government spending and taxes to stabilize domestic output, employment, and the price level. The higher the influence of the automatic stabilizers, the lesser the economy stimulus packages should be adopted by an economy which is currently affected by the economic and financial crisis, that is, a discretionary fiscal policy. Automatic stabilizers will _____ the _____ effect of the _____ in aggregate demand. Expansionary vs. The standardized budget refers to the number of workers who are underemployed when the level of unemployment is 4 to 5 percent. B. D. households, businesses, and government, but not international trade. Which one of the following statements about the standardized budget is correct? A. This includes government spending and levied taxes. B. "A discretionary fiscal policy is a monetary policy that is created and initiated by a government entity as a means of dealing with events and trends that are t… B) the authority that the President has to change personal income tax rates. acts as an automatic contractionary fiscal policy. The amount by which federal tax revenues exceed federal government expenditures during a particular year is the A. budget surplus. Which one of the following statements about efficiency wages is correct? taxes to account for externalities and control pollution. Expansionary fiscal policy is so named because it A. necessarily expands the size of government. Read … ScholarOn, 10685-B Hazelhurst Dr. # 25977, Houston, TX 77043,USA. ? The amount by which government expenditures exceed revenues during a particular year is the A. GDP gap. The amount by which federal tax revenues exceed federal government expenditures during a particular year is the A. budget surplus. C. is designed to expand real GDP. ... What can managers garner from the numerous Contingency Theories of Effective Leadership? An appropriate fiscal policy for severe demand-pull inflation is A. depreciation of the dollar. The standardized budget tells us what the size of the federal budget deficit or surplus would be if the economy was at full employment. C)stay the same unless the government changes the tax rates. Efficiency wages are usually less than market wages. C. Discretionary fiscal policy refers to the authority that the President has to change personal income tax rates. B. Which one of the following statements about fiscal policy is correct? Voters like both tax cuts and more benefits, and as a result, politicians that use expansionary policy tend to be more likable. Discretionary fiscal policy is a change in government spending or taxes. During the budget process, Congress issues a budget resolution which includes levels of discretionary spending, deficit projections, and instructions for changing entitlement programs and tax policy. Fiscal Policy Discretionary fiscal policy refers to the federal government's management of government spending and taxes. Fiscal policy refers to the use of the government budget to affect the economy. 163.Congress increases personal income tax rates to balance the budget. Discretionary Fiscal Policy Definition. The graphical relationship between the price level and the amount of real GDP that businesses will offer for sale is known as the _______ curve. Nondiscretionary fiscal policy is at work everyday as a result of policies enacted years ago. 5. C)government, 161.Discretionary fiscal policy refers to changes in: 2. The fact that tax receipts fall during a recession: reduces the adverse effect of the initial fall in aggregate demand. Which one of the following statements about the standardized budget is correct? The discretionary fiscal policy refers to the fiscal policy of the government that is used according to the need of the government. 10. D. Discretionary fiscal policy refers to changes in taxes and government expenditures made by Congress to stabilize the economy. b. government spending at the discretion of the Congress. Methodologically, the fluctuation of … Discretionary fiscal policy refers to: intentional changes in taxes and government expenditures made by Congress to stabilize the economy. For instance, when the UK government cut the VAT in 2009, this was intended to … Answers will not be recorded until you hit Submit Exam. C. A lump-sum tax means that the same amount of tax revenue is collected at each level of GDP. The automatic stabilizer in government tax revenue that occurs when GDP rises _____ the multiplier. 2. In the United States, discretionary spending refers to optional spending set by appropriation levels each year, at the discretion of Congress. 13. A)interest rates. In a private closed economy, when aggregate expenditures equal GDP, then A. disposable income equals consumption minus saving. the multiplier effect of government purchases. Kindly login to access the content at no cost. 164.When the economy expands, income tax receipts will: A)rise, but sales tax revenues will remain the same. When the economy expands, income tax receipts will: rise, but sales tax revenues will remain the same. All Rights Reserved. Economists refer to this outcome as the _______ effect. The expected rate of return on this tool is A. 11. the changes in taxes and transfers that occur as GDP changes. C)government : 2032664. C. Efficiency wages are above-market-wages that bring forth so much added work effort that per-unit production costs are lower than at market wages. Automatic stabilizers are government spending and taxation changes that cause fiscal policy to be _____ when the economy contracts. 20. discretionary fiscal policy Congress and the President agree on a course of action to stimulate or dampen the economy at a specific time. Suppose that a new machine tool having a useful life of only one year costs $80,000. Fiscal policy can be either expansionary or contractionary. ? C. planned investment equals saving. A private closed economy includes A. households, businesses, and international trade, but not government. Discretionary fiscal policy refers to the changes in taxes and transfers that occur as GDP changes. Which one of the following statements about discretionary fiscal policy is correct? QUESTION 3 This E-mail is already registered with us. There are two types of fiscal policies that the government can make use according to its discretion. B)fall, but sales tax revenues will rise. The standardized budget refers to the inflationary impact that the automatic stabilizers have in a full-employment economy. C. The standardized budget refers to that portion of a full-employment GDP that isn’t consumed in the year it’s produced. C. budget deficit. B. budget deficit. Government tax revenue rises and falls with the business cycle as: the multiplier effect of taxes and government transfers. D)taxes to account for externalities and control pollution. D. full-employment. A)interest rates. D. Efficiency wages are relevant to macroeconomics because they explain rightward shifts in aggregate demand. Mark all the FALSE statements B)the money supply. Consider a European call option and a European put option on a non-dividend-paying stock. C. The interest-rate effect suggests that an increase in the price level will increase the demand for money, increase interest rates, and decrease consumption and investment spending. A. These changes occur on a year by year basis and are used to reflect the current economic status. the marginal propensity to save increases as income decreases. Discretionary fiscal policy refers to any change in government spending or taxes that destabilizes the economy. Discretionary fiscal policy refers to changes in taxes and government expenditures made by Congress to stabilize the economy. 2. Discretionary fiscal policy refers to: ? C. 20 percent. Discretionary fiscal policy measures enacted during the ... Chapter 13 - ECO 1002 Intro To Macro - Villanova - StuDocu. B. massive unemployment of labor and capital created conditions where sudden demand changes are unlikely to change prices. 161.Discretionary fiscal policy refers to changes in: B. Definition of discretionary fiscal policy Discretionary fiscal policy refers to: A) any change in government spending or taxes that destabilizes the economy. The standardized budget tells us that in a full-employment economy the federal budget should be in balance. In macroeconomics, discretionary policy is an economic policy based on the ad hoc judgment of policymakers as opposed to policy set by predetermined rules. Congress increases personal income tax rates to balance the budget. 169.Government tax revenue rises and falls with the business cycle as: A)the multiplier effect of taxes and government transfers. B. price level. D. 2 percent. Discretionary fiscal policy refers to: A. any change in government spending or taxes that destabilizes the economy. It can be of two types, discretionary and nondiscretionary fiscal policy (Carrere & Melo, 2008). A. 167.Fiscal policies that require no government action but that are expansionary when the economy contracts and contractionary when the economy expands are known as: 168.Because the revenue from personal income taxes increases as disposable income increases: B)the marginal propensity to consume decreases as income increases. Chapter 30: Fiscal Policy. stay the same unless the government changes the tax rates. 16. 14. Which one of the following statements about lump-sum taxes is correct? Posted on December 2, 2020 by December 2, 2020 by 2.2.1 Discretionary fiscal policy as a stabilization tool Typically, the idea behind this type of policy is to deliberately impact that trend, gradually moving the economy in a direction that is esteemed by government leadership as more beneficial to the jurisdiction. 12. C. public debt. Questions 1 to 20: Select the best answer to each question. any change in government spending or taxes that destabilizes the economy. Fiscal policy is largely based on ideas from John … Difference between Discretionary and Nondiscretionary Fiscal Policy Fiscal policy refers to the governmental actions through which it can maintain revenue and control expenditure. discretionary fiscal policy as well. Exogenous discretionary fiscal policy refers to a change in spending or revenue that is not induced by the macroeconomic environment, whereas, the endogenous discretionary fiscal policy includes changes in spending or revenue in response to changing economic conditions. 166.The fact that tax receipts fall during a recession: C)reduces the adverse effect of the initial fall in aggregate demand. 1. Fiscal Stance: This refers to whether the government is increasing AD or decreasing AD, e.g. A $30 billion increase in government spending B. Fiscal policy refers to the altering of the interest rate to change aggregate demand. A. Uncategorized lags to discretionary fiscal policy. 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