Fiscal Policy And The Exonomy

Question 1

The goal of _______ policy is to maintain steady, healthy economic growth.

Answer 1

Fiscal

Question 2

The GDP grows every year following a long-term growth path of about _____% annual growth.

Answer 2

3%

Question 3

The last recessions in the last several years were in ________, ________, and the most serious ________-________.

Answer 3

1990

2001

2007-2009

Question 4

The recession of 1990-1991 lasted 8 months and GDP dropped by ______%

Answer 4

1.3%

Question 5

Which recession was one of the weakest in US history?

Answer 5

Recession of 2001

Question 6

The recession of 2001 lasted 8 months and the GDP dropped by ______%

Answer 6

1/4%

Question 7

What was the most serious recession we’ve had since the depression?

Answer 7

2007-2009 recession

Question 8

The recession of 2007-2009 lasted 18 months and saw the GDP drop by ______%

Answer 8

4.2%

Question 9

Who tracks, identifies, and dates recessions in the US?

Answer 9

National Bureau of Economic Research (NBER)

Question 10

What does not usually rise the same time the recession starts?

Answer 10

Unemployment

Question 11

What tends to occur after a recession has already begun?

Answer 11

Layoffs

Question 12

Workers become more _________ after some layoffs have shifted more work to the remaining staff.

Answer 12

Efficient

Question 13

When the same amount of workers can produce more output, we refer to that as an increase in what?

Answer 13

Productivity

Question 14

When a recession ends the increase in productivity of the existing workers can handle the increasing demand and business don’t need to hire right away. This is why unemployment is considered what?

Answer 14

A lagging indicator of recessions

Question 15

What changes don’t mark the starting and ending dates of a recession because they lag the changes in GDP?

Answer 15

Unemployment

Question 16

Prior to the depression the accepted rule in the economic community was to leave the economy ________ and it would correct ________.

Answer 16

Alone

Itself

Question 17

Leave the economy alone and it would correct itself is called what?

Answer 17

Laissez-faire

Question 18

Followers of John Maynard Keynes said that when an economic downturn begins, it will what?

Answer 18

Spiral

Question 19

Keynesian suggestion was to replace the dwindling private sector spending with what?

Answer 19

Public sector spending

Question 20

The Works Progress Administration (WPA) was created by whom?

Answer 20

Roosevelt Administration

Question 21

What provided jobs for unemployed workers and also gave society much needed public goods?

Answer 21

Works Progress Administration (WPA)

Question 22

To pay all the Work Progress Administration (WPA) workers the government had to __________ the money.

Answer 22

Borrow

Question 23

The idea behind borrowed money is that the _______ from the additional income would pay off the ______ generated to jump start the economy.

Answer 23

Taxes

Debt

Question 24

The US providing guns, ships and tanks to allies in Europe during WWII got the economy out of the what?

Answer 24

Depression

Question 25

When there is too much spending, ___________ begins to build.

Answer 25

Inflation

Question 26

Increasing demand to fight unemployment is called what?

Answer 26

Expansionary fiscal policy

Question 27

Reducing demand to fight inflation is called what?

Answer 27

Contractionary fiscal policy

Question 28

By the time the problem is recognized, a bill is passed, and spending begins the recessions could be over. This illustrates what problem with fiscal policy?

Answer 28

Timing problem

Question 29

A second problem in fiscal policy is when federal spending rises, local spending drops so net spending stays the same. This is what problem in fiscal policy?

Answer 29

A political problem

Question 30

Public spending may use the workers and capital that would have been used to build private investment. This third problem in fiscal policy is known as?

Answer 30

Crowding out effect

Question 31

When the GDP falls or increases, key economic indicators such as unemployment do not change at the same time GDP does. This is known as a what?

Answer 31

Lagging indicator

Question 32

A drop in the GDP for at least two quarters that don’t need to be consecutive is considered a what?

Answer 32

Recession

Question 33

What measures the output per resource input?

Answer 33

Productivity

Question 34

A budget that is balanced over the economic or business cycle is what?

Answer 34

Cyclically balanced budget

Question 35

What budget related incident may occur during a recession?

Answer 35

Budget deficit