D. Unemployment rale is 18. A given reduction in government spending will dampen
ID: 1128659 • Letter: D
Question
D. Unemployment rale is 18. A given reduction in government spending will dampen demand-pall inflation by a greater amount when the: A. Economy's MPS is large B. Economy's aggregate supply curve is flat C. Economy's MPC is large 19. One advantage of automatic fiscal policy over discretionary fiscal policy is that automatic fiscal policy: A. Makes the actual budget a better reflection of the condition of the economy than the standardized budget B. Does not produce a cyclical deficit as discretionary policy does C. Is not subject to the timing problems of discretionary policy D. Has a greater multiplier effect than discretionary policy Due to automatic stabilizers, when income rises, government transfer spending: A. Increases and tax revenues decrease B. Decreases and tax revenues increase C. And tax revenues decrease D. And tax revenues increase 20, 21 . If government tax revenues automatically change in a countercyclical direction over the course of the business cycle, this would be called a(n): A. Discretionary fiscal policy B. Expansionary fiscal policy C. Fiscal multiplier effect D. Built-in fiscal stabilization Which ofthe following is an example ofbuilt-instability? As real GDP decreases, income tax revenues. A. Increase and transfer payments decrease B. Decrease and transfer payments increase C. And transfer payments both decrease D. And transfer payments both increase 22. 23. As the economy declines into recession, the collection of personal income tax revenues automatically falls. This relationship best describes how the progressive income tax system A. Increases crowding out in the economy B. Decreases real interest rates in the economy C. Offsets the timing problem for fiscal policy D. Serves as an automatic stabilizer for the economy 24. The more progressive the tax system, the: A. Less is the built-in stability for the economy B. Greater is the built-in stability for the economy C. Less is the effect of crowding-out on the economy D. Greater is the severity of business fluctuations on the economy please give me the finl answer from 18 24 3Explanation / Answer
18. A. Economy's MPS is large.
Explanation: When MPS is large, people will save more than consume, which will reduce the demand-pull inflation.
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