ECO 372 Week 4 Knowledge Check

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ECO/372 Entire Course Link

https://uoptutorialstore.com/category/eco-372/

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ECO 372 Week 4 Knowledge Check

Instructions

Week 4 Knowledge Check
The material presented below is not meant to be a comprehensive list of all you need to know in the content area. Rather it is a starting point for building your knowledge and skills. Additional study materials are recommended in each area below to help you master the material.
Personalized Study Guide Results:
Score: 6 / 6
Concepts Mastery Questions
BUDGET SURPLUS 100% • 1
BUDGET DEFICIT AND BUDGET SURPLUS 100% • 2• 3
TAX POLICY 100% • 4• 5
FISCAL POLICY 100% • 6
Concept: BUDGET SURPLUS
Mastery : 100% Questions : • 1
Materials on the concept:
• Defining Deficits and Surpluses
1.
In the long-run framework, budget surpluses
• A.
should be run whenever output dips below potential output
• B.
should never be run since they crowd out investment in the short-run
• C.
are better than budget deficits over the long-run because unlike budget deficits, they increase savings and investment
• D.
should be run on a permanent basis since they boost saving and investment and stimulate growth
Concept: BUDGET DEFICIT AND BUDGET SURPLUS
Mastery : 100% Questions : • 2• 3
Materials on the concept:
• Defining Deficits and Surpluses
• Nominal and Real Deficits and Surpluses
• Arbitrariness of Defining Deficits and Surpluses
2.
The budget deficit or surplus is
• A.
well defined and straightforward to measure
• B.
well defined but frequently distorted by creative but improper accounting practices
• C.
difficult to measure and can be defined legitimately in several ways
• D.
so arbitrarily defined that it is meaningless
3.
Deficits and surpluses are best viewed as
• A.
comprehensive measures of a government budget
• B.
a summary measure of a nation's fiscal policy
• C.
a summary measure of the financial health of the economy
• D.
a summary measure of a nation's monetary policy
Concept: TAX POLICY
Mastery : 100% Questions : • 4• 5
Materials on the concept:
• Assumptions of the AS/AD Model
4.
Suppose the government increases spending by $30 billion and raises taxes at by $20 billion at the same time. Then,
• A.
interest rates will most likely stay the same
• B.
interest rates will most likely increase
• C.
business investment is not likely to change
• D.
business investment is likely to increase due to crowding out
5.
Because automatic stabilizers lower transfer payments and raise tax receipts as an economy recovers from a recession, they
• A.
slow down the pace of an economic recovery
• B.
increase the pace of an economic recovery
• C.
do not affect the pace of an economic recovery
• D.
accelerate the recovery from a recession until inflation starts to develop, at which point they slow the recovery
Concept: FISCAL POLICY
Mastery : 100% Questions : • 6
Materials on the concept:
• The Fiscal Policy Dilemma
6.
Most of the government budget is mandatory spending through programs like Medicare and Social Security, and much of the rest is politically difficult to alter. Because of this,
• A.
fiscal policy is always undertaken only when there is a national crisis that motivates voters to seek change
• B.
fiscal policy that involves raising taxes is more likely to be implemented than fiscal policy that involves borrowing money
• C.
the amount of spending is unlikely to be implemented as economists suggest
• D.
most spending is geared to perform as an automatic stabilizer, so that Congress is in fact largely irrelevant when it comes to providing a fiscal response to a recession
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