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2 Nov 2018

What are the effects of increasing in government spending both mandatory and discretionary spending on US economy forecast ot grow by 1.5%

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Keith Leannon
Keith LeannonLv2
3 Nov 2018
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Related questions

When the government conducts activist fiscal​ policy, what type of spending does it usually​ use?
 
A. discretionary spending
B. entitlement and mandatory spending
C. net interest spending
D. strategic spending
Background image

 

Automatic stabilizers lead to changes in taxation and government spending as economic output varies. How do automatic stabilizers impact tax revenue and government spending during a recession?

Tax revenue will:

a. increase

b. not change

c. decrease

and government spending will:

a. increase

b. not change

c. decrease

Suppose that the government is required to balance the budget. Which of the following is an appropriate discretionary approach during a recession and what effect would it have to the economy?

a. Invest in public infrastructure that promotes employment and stimulates the economy.

b. Cut government spending to equal tax revenue possibly magnifying the effects of a recession.

c. Increase government spending to stimulate the economy causing an increase in overall aggregate demand.

d. Cut taxes to encourage consumer spending which would minimize the effects of the recession.

Discretionary fiscal policy refers to changes in:

a. government spending or taxes made by the President on Twitter.

b. money supply and interest rates made by the President.

c. taxes and transfers that occur automatically as GDP changes.

d. taxes and government expenditures made by Congress to stabilize the economy.

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