Q6. When an economy is in an economic expansion, automatic stabilizers will tend to alter government spending and taxation so as to:

A)   reduce the budget deficit (or increase the surplus).

B)   ensure that the budget will remain in balance.

C)   enlarge the budget deficit (or reduce the surplus).

Q7. Automatic stabilizers work by:

A)   instituting counter-cyclical fiscal policy without the delays associated with policy changes that require legislative action.

B)   initiating legislative action designed to stimulate demand during the contraction phase of the business cycle and restrain demand during the expansion phase.

C)   initiating changes in monetary policy without requiring action by the central bank.

Q8. Which of the following statements best describes automatic stabilizers? Although no legislative action has been taken, automatic stabilizers are programs that apply:

A)   stimulus during a recession but do not apply restraint during an economic boom.

B)   restraint during a recession and stimulus during an economic boom.

C)   stimulus during a recession and restraint during an economic boom.

Q9. Which of the following statements best explains how automatic stabilizers work? Even without a change in fiscal policy, automatic stabilizers tend to promote:

A)   a budget surplus during a recession and a budget deficit during an inflationary expansion.

B)   a budget deficit during a recession and a budget surplus during an inflationary expansion.

C)   a budget deficit during a recession but do not promote a budget surplus during an inflationary expansion.

Q10. Which of the following is most likely to be described as an automatic fiscal policy stabilizer?

A)   A fixed income tax rate.

B)   Increase in government spending on defense.

C)   Cuts in the Federal Funds target rate.

答案和详解如下：

Q6. When an economy is in an economic expansion, automatic stabilizers will tend to alter government spending and taxation so as to:

A)   reduce the budget deficit (or increase the surplus).

B)   ensure that the budget will remain in balance.

C)   enlarge the budget deficit (or reduce the surplus).

Correct answer is A)

When an economy is in an economic expansion, automatic stabilizers will tend to alter government spending and taxation so as to reduce the budget deficit (or increase the surplus).

Q7. Automatic stabilizers work by:

A)   instituting counter-cyclical fiscal policy without the delays associated with policy changes that require legislative action.

B)   initiating legislative action designed to stimulate demand during the contraction phase of the business cycle and restrain demand during the expansion phase.

C)   initiating changes in monetary policy without requiring action by the central bank.

Correct answer is A)

Automatic stabilizers reduce economic instability because these programs are already in place and do not involve the delays associated with fiscal policymaking.

Q8. Which of the following statements best describes automatic stabilizers? Although no legislative action has been taken, automatic stabilizers are programs that apply:

A)   stimulus during a recession but do not apply restraint during an economic boom.

B)   restraint during a recession and stimulus during an economic boom.

C)   stimulus during a recession and restraint during an economic boom.

Correct answer is C)

Automatic stabilizers tend to increase deficits during recessions, which stimulates demand during the contraction phase of the business cycle, and increase surpluses or reduce deficits during economic expansions, to reduce aggregate demand during expansions.

Q9. Which of the following statements best explains how automatic stabilizers work? Even without a change in fiscal policy, automatic stabilizers tend to promote:

A)   a budget surplus during a recession and a budget deficit during an inflationary expansion.

B)   a budget deficit during a recession and a budget surplus during an inflationary expansion.

C)   a budget deficit during a recession but do not promote a budget surplus during an inflationary expansion.

Correct answer is B)

Automatic stabilizers such as unemployment compensation, corporate profits tax, and the progressive income tax run a deficit during a business slowdown but run a surplus during an economic expansion. Therefore, they automatically implement countercyclical fiscal policy without the delays associated with policy changes that require legislative action.

Q10. Which of the following is most likely to be described as an automatic fiscal policy stabilizer?

A)   A fixed income tax rate.

B)   Increase in government spending on defense.

C)   Cuts in the Federal Funds target rate.

Correct answer is A)

Automatic fiscal stabilizers refer to changes in government spending or taxing that occurs automatically as the business cycle changes. One example of an automatic fiscal policy stabilizer is an “induced tax”. Induced taxes refer to the amount of taxes collected as a percentage (i.e., income tax rate) of income. Incomes are positively related to GDP, implying that incomes rise during an economic boom. As incomes rise, the total amount of taxes collected by the government automatically increases. The increase in taxes paid by corporations and individuals tend to slow the economy. Increases in spending on defense or highways are examples of discretionary fiscal policy (requiring government Administration approval). The Federal Funds target rate is set by the Federal Reserve and is not an example of fiscal policy.

O(∩_∩)O谢谢

aacba

Q1. A