Chapter 15 Fiscal Policy

| November 9, 2018

31)
Name two actions that a government could take if it wants to implement an
expansionary fiscal policy.

32)
Name two actions a government could take if it wants to implement a
contractionary fiscal policy.

33)
What is meant by the term “inside lags”?

34)
What is meant by the term “outside lags”?

35)
What are the two basic reasons inside lags occur?

36)
Why is it difficult to implement fiscal policies?

15.2 The Federal Budget

1)
Which component of federal spending is included in GDP?
A)
net exports
B)
transfer payments
C)
government purchases
D)
capital supply

2)
Why are transfer payments not included in GDP?
A)
The amount is too low to have any effect.
B)
Unemployment varies and can’t be tracked.
C)
They do not represent payments to those who contributed resources to currently
produced goods or services.
D)
Money companies receive from the government isn’t reported.

3)
Spending on programs that Congress authorizes ________ is known as
discretionary spending.
A)
by prior law
B)
on an annual basis
C)
on an off-budget emergency basis
D)
after approval from the Federal Reserve

4)
When the government conducts activist fiscal policy, what type of spending does
it usually use?
A)
entitlement and mandatory spending
B)
net interest spending
C)
discretionary spending
D)
strategic spending

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