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Fiscal Policy in Economics Chapter Exam

Exam Instructions:

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

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Question 1 1. Why do congressman seek pork barrel spending for their districts?

Question 2 2. Why do citizens often criticize pork barrel spending?

Question 3 3. How do congressmen add pork barrel spending projects to a bill?

Question 4 4. How did Super Storm Sandy aid become subject to pork barrel spending?

Question 5 5. Which is an example of pork barrel spending?

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Question 6 6. Which of the following is the BEST explanation of how a government intervenes in an economy utilizing fiscal policy?

Question 7 7. If the government wants to increase the rate of economic growth, what type of monetary policy will it implement?

Question 8 8. What is the cyclical growth and decline of an economy called?

Question 9 9. How does a government implement a contractionary fiscal policy?

Question 10 10. Which of the following is the BEST explanation of monetary policy?

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Question 11 11. Why can crowding out have a strong impact on the economy?

Question 12 12. Which of the following BEST describes crowding out?

Question 13 13. Which of the following is an example of a budget surplus?

Question 14 14. In a certain fiscal year, the federal government receives $4 trillion in revenue and spends $3.8 trillion for goods and services. What effect would this have on the national debt?

Question 15 15. Why is the income tax relevant to the federal government?

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Question 16 16. How do lag times differ between monetary policy implementation and fiscal policy implementation?

Question 17 17. Which of the following statements is NOT true regarding fiscal and monetary policy?

Question 18 18. What is a policy lag?

Question 19 19. In general, because of policy lags, which of the following is true?

Question 20 20. Why can recognition lag occur?

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Question 21 21. If the desired fiscal stimulus is $50 million and the marginal propensity to consume (MPC) is 0.8 how much should taxes be cut to bring the economy to potential?

Question 22 22. If there is a $75 million shortfall in aggregate demand, the amount of fiscal stimulus needed to close the shortfall is:

Question 23 23. If the shortfall in aggregate demand (AD) is $100 million and the marginal propensity to consume (MPC) is 0.7, how much fiscal stimulus from government purchases is needed to bring the economy to potential?

Question 24 24. Which of these describes the multiplier effect?

Question 25 25. Which of these government actions would be considered fiscal stimulus?

Fiscal Policy in Economics Chapter Exam Instructions

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

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