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C719
Module 8
Question | Answer |
---|---|
The use of government spending and taxes to stabilize the economy. | Fiscal policy |
During a recession, the government should ____________ spending and ____________ taxes | Increase / Decrease |
An increase in government spending will... | Shift AD right |
A decrease in government spending will... | Shift AD left |
An increase in taxes will... | Shift AD left |
A decrease in taxes will... | Shift AD right |
The time it takes the government to identify a need to enact fiscal policy. | Recognition lag |
The time it takes the government to enact fiscal policy. | Implementation lag |
The time it takes fiscal policy to have an effect on the economy. | Impact lag |
When increased government borrowing reduces private investment. | Crowding out |
Unemployment compensation, Social Security, and income taxes are examples of... | Automatic stabilizers |
When congress passes a bill that increases spending. | Discretionary spending |