AnswersMO-EconomicsFiscal Policy: Spending

Fiscal Policy: Spending Answers

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A diagram shows that taxes go into the government, which then go into spending.

Question illustration
A
Government Spending
B
The National Economy
C
The Federal Debt
D
Fiscal Policy
3

When revenues are higher than expenditures in a budget, that budget

A
shows a deficit.
B
is in balance.
C
must be discarded.
D
shows a surplus.
4

Gino is writing a paper about the effects of fiscal policies on the economy. Gino is describing a fiscal policy that aims to improve inflation.How does the policy that Gino is describing most likely affect interest rates and unemployment?

A
The policy would most likely increase interest rates and unemployment.
B
The policy would most likely decrease interest rates and unemployment.
C
The policy would most likely increase unemployment but decrease interest rates.
D
The policy would most likely increase interest rates but decrease unemployment.
5

Which of the following statements most accurately describes the federal government and its employees?

A
Millions of Americans work for the federal government.
B
The federal government is not allowed to hire employees.
C
The majority of Americans are employed by the federal government.
D
The number of federal employees is too small to affect government spending.
8

Which of these effects of expansionary spending would a government most want to avoid?

A
higher employment
B
higher inflation
C
growth in production
D
growth in consumer spending
9

Revenue and expenditures are sitting on a balance. Expenditures are lower than revenue.

Question illustration
A
a budget surplus
B
a budget deficit
C
a balanced budget
D
a plan to balance the budget

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Fiscal Policy: Spending Answers — MO-Economics