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Jeopardy!

Jeopardy!. An increase in taxes will change aggregate demand in which way?. Decrease. A tax that charges the poor a larger percent of their income than the rich may be described as this . . Regressive tax. A tax which does not vary with level of GDP . Fixed tax.

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Jeopardy!

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  1. Jeopardy!

  2. An increase in taxes will change aggregate demand inwhich way?

  3. Decrease

  4. A tax that charges the poor a larger percent of their income than the rich may be described as this.

  5. Regressive tax

  6. A tax which does not vary with level of GDP

  7. Fixed tax

  8. A change in a fixed tax will simply shift theconsumption function. However, an increase in avariable tax will affect the consumption function inwhat way?

  9. Flatten

  10. If MPC = .75, the tax rate is 20%, and you receive a$1000 bonus at work, how much will you spend?

  11. $600

  12. The government’s plan for spending and taxation whichis designed to steer aggregate demand in somedirection

  13. Fiscal Policy

  14. A feature of the economy that reduces sensitivity toshocks

  15. Automatic stabilizer

  16. If taxes and government spending increase the exactsame amount ($200 Billion), what will happen to GDP?

  17. Increase by $200 Billion

  18. In an economy with an income tax, the multiplier is likely to be ________ than without the tax.

  19. Smaller

  20. The multiplier for a change in taxes is _______ the multiplier for a change in government spending

  21. Smaller than

  22. (Automatic/Discretionary): Congress provides a one-time tax rebate to all tax payers.

  23. Discretionary

  24. (Automatic/Discretionary): Tax revenue increases as an improving stock market leads to increasing capital gains

  25. Automatic

  26. (Expansionary/Contractionary)(Automatic/Discretionary):Congress votes to build a new interstate highway.

  27. Expansionary, Discretionary

  28. (Expansionary/Contractionary)(Automatic/Discretionary):Congress votes to create an expanded unemployment insurance program

  29. Discretionary, Expansionary

  30. (Expansionary/Contractionary)(Automatic/Discretionary): Congress cuts funding to the National Teapot Museum, and uses the funds saved to increase transfer payments to Snapple, Inc.

  31. Contractionary, Discretionary

  32. This occurs when expenditures exceed revenue over a given period of time.

  33. Deficit

  34. This is the sum of deficits over time.

  35. Debt

  36. _______ describes a deficit the government incurs at full employment.

  37. Structural deficit

  38. When unemployment is high the government’s actual deficit will be _____ than the structural deficit.

  39. Higher

  40. The group to which the federal government owes the largest portion of its debt.

  41. The federal government.

  42. Large deficits tend to lead to higher/lower interest rates.

  43. Higher

  44. This describes the situation in which higher government spending leads to less (I).

  45. Crowding out.

  46. Low interest rates will lead the production possibilities frontier to do this in the future.

  47. Shift right.

  48. DAILY DOUBLE!

  49. _______ results from increased government spending when the available supply of loanable funds is high.

  50. Crowding in

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