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Questions Bank (1541872 total)
Which of the federal government's revenues fluctuates the most?
indirect taxes
0%
transfer payments
0%
personal income taxes
0%
corporate income taxes
0%
investment income
0%
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Which of the following transactions would
not
increase an existing budget deficit?
a decrease in investment income
❌
an increase in government transfer payments
0%
an increase in indirect taxes
0%
an increase in government expenditures on goods and services
0%
an increase in interest on the government debt
0%
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The economy is in a recession and the recessionary gap is large. What is a discretionary fiscal stimulation package that would avoid a larger budget deficit?
an increase in government expenditure and an equal increase in taxes
✅
an increase in transfer payments and an equal decrease in taxes
❌
a decrease in government expenditure and an equal decrease in taxes
❌
a decrease in transfer payments and an equal increase in consumption expenditure
❌
an increase in transfer payments and an equal decrease in consumption expenditure
❌
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Who makes Canada's fiscal policy?
the federal government and Parliament
0%
the governor of the Bank of Canada and Parliament
0%
the governor general in consultation with the prime minister
0%
the provincial premiers and the prime minister
0%
the Bank of Canada
0%
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Which of the following actions is an example of expansionary fiscal policy?
An action that increases long-run aggregate supply.
0%
An action that increases aggregate demand.
0%
An action that decreases aggregate demand.
0%
A, C, and D are correct.
0%
An action that increases short-run aggregate supply.
0%
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Why is the effect of a change in taxes on the government budget balance less than the same sized change in government expenditure?
The change in government expenditure is not directly affected by consumption expenditure.
0%
The change in consumption expenditure is equal to
MPS
times the tax change.
0%
The change in consumption expenditure is equal to
MPC
times the tax change.
0%
Tax rates are the same regardless of income levels.
0%
Some people do not pay their taxes.
0%
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If the economy is in a recession and the government has a budget deficit, how would a business-cycle expansion impact the deficit?
The expansion would automatically decrease the deficit.
✅
The expansion would automatically balance the budget.
❌
The expansion would automatically increase the deficit.
❌
The expansion would leave the deficit unchanged.
❌
The expansion would increase the deficit only if the interest rate rises.
❌
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If the government's revenues exceed its outlays, what is the government's budget balance and is the budget a surplus or a deficit?
The government's budget balance is ________, and the budget is a ________.
negative; surplus
❌
zero; deficit
❌
positive; deficit
❌
negative; deficit
❌
positive; surplus
✅
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What is the crowding-out effect of the government expenditure multiplier?
It is the
increase in the government deficit that lowers the real interest rate and decreases saving.
0%
decrease in the government surplus that lowers the real interest rate and decreases investment.
0%
increase in government borrowing that lowers the real interest rate and decreases saving.
0%
decrease in the government surplus that raises the real interest rate and decreases consumption expenditure.
0%
increase in government borrowing that raises the real interest rate and decreases investment.
100%
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If the government's outlays exceed its revenues, what is the government's budget balance and is the budget a surplus or a deficit?
The government's budget balance is ________, and the budget is a ________.
zero; surplus
❌
negative; surplus
❌
positive; deficit
❌
negative; deficit
✅
positive; surplus
❌
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