chapter 16 answers final Flashcards
why is government fiscal policy important
it affects the economy
which of the following acts of Congress would be unconstitutional?
a tax on automobile made in Michigan and exported to canada
which tax is withheld from employee paychecks
income tax
which are sources of non tax revenue for the federal government
canal tolls and fees for passports and copyrights
which is a reason why the federal government borrows money
to pay the costs of war
what would a believers in supply-side economics want to do?
strengthen private business
which must approve all borrowing by the federal government
Congress
which is an important criticism of the size of the public debt?
a huge debt will have to be paid by future taxpayers
which is the largest entitlement program today?
Social Security
Which federal budget items have controllable costs
spending on highways
who prepares the federal budget each year to preset to congress?
the president
What must congress do with the budget by october of each year to avoid having to pass an emergency spending bill>
get the budget approved by the president
What usually happens when the GDP increases at a steady rate?
the economy grows
which of the following is most likely to slow economic growth
higher taxes
what happens when the federal reserve lowers the discount rate
banks can lower their interest rates
which is the term for the amount of money that the federal reserve tells banks to keep on hand?
reserve requirement
why might Congress levy a tax for a purpose other than to raise money?
to discourage a harmful activity
which describes an excise tax?
a luxury tax
which is a source of non tax revenue?
interest charges of the federal reserve system
what occurs when the government’s income is not enough to cover the amount the it spends?
deficit
The New Deal programs of the Great depression were examples of which of the following?
demand-side economics
what limit does the constitution place on the amount of money the federal government may borrow each year
borrowing is unlimited
which of the following decides how much the federal government can spend each year?
Congress
Which describes the discount rate?
the interest rate banks pay when they borrow money from a federal reserve bank