Eacl is MULTIPLE CHOICE: There is only one correct answer for each question. 1.4

Question

Eacl is MULTIPLE CHOICE: There is only one correct answer for each question. 1.45 points. If there are calculations required to answer the question, show your work. 1. Suppose a senator desires a tax increase on gasoline. Can this be introduced in the Senate? A) Yes B) No 2. Does the Consti A) Yes B) No tution authorize the federal government to borrow money? 3. Which of the following may decrease the effectiveness of fiscal policy? . A) time lags B) consumer and supplier expectations emand C) crowding out may impact aggregate supply as well as aggregate d D) All of the above 4. Where in the Constitution is the income tax established? A) Article I, Section 8 B) 2nd Amendment C) 14th Amendment D) 16th Amendment 5. If the government increased defense spending by $1 million and laid off Justice Department employees to decrease the Department of Justice budget by $1 million, we would expect the net effect to be: A) an increase in the budget deficit and in transfer payment. B) an increase in the budget deficit and in net taxes. C) an increase in the budget deficit and in government spending. D) no change in the budget deficit because there is no net change in government spending. 6. If government budgets were required to be annually balanced: A) Income taxes could no longer be used. B) Either government spending would have to fall and/or tax rates would have to increase during recessions. C) The government budget would have less of a stabilizing component. D) None of the above. Which of the following would decrease the size of a federal budget deficit? a recession an increase in defense spending growth in real GDP a decrease in taxes 7. A) B) C) D)

Explanation / Answer

1)- NO, because increase in gasoline taxes cannot compete with other proucer of gasoline.

2)- yes, but only congress goverment

3)-Time lag, it reduces the effectiveness of fiscal policy

4)-16th amendment, 16thjune 1909,

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