revision questions chapter 29 pt2 Flashcards

1
Q

Which of the following is NOT a source of revenue for the UK government?

A

transfer paymenets

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2
Q

An example of an automatic fiscal policy stabilizer is when

A

tax revenues decrease as real GDP decreases.

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3
Q

The difference between the government debt and the budget deficit is

A

the budget deficit shows the annual discrepancy between government outlays and tax revenue and the government debt shows the accumulated balance of past government debts.

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4
Q

The government’s budget deficit or surplus equals the

A

total tax revenue - total outlays.

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5
Q

Economic data for a mythical economy in the years 2000-2004 are summarized in the figure above. Assume that the spending formulas and tax schedules are identical for all years. When the economy is above full employment, the government has a

A

budget surplus. (when govs revenue exceeds expenditure)

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6
Q

A cyclical surplus is a

A

government budget surplus only because real GDP is greater than potential GDP.

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7
Q

The government expenditures multiplier is the change in

A

equilibrium expenditure divided by the change in government expenditures.

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8
Q

Which of the following is NOT a government outlay item?

A

Purchases of foreign bonds.

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