1. Which statement is NOT a major limit to the effectiveness of fiscal policy? S
ID: 1173833 • Letter: 1
Question
1. Which statement is NOT a major limit to the effectiveness of fiscal policy? Select one: a. A single increase in government spending may not be enough to stimulate the economy. b. The crowding out effect is transmitted through financial markets. c. Fiscal policy is not very effective in combating supply side shocks. d. A multiplier effect is associated with changes in spending and taxation.2. _____ puts more spending in the hands of the private sector, while _____ put more spending in the hands of the government. Select one: a. A tax cut; increased government expenditures b. A tax cut; tax rebates c. Increased government spending; tax cuts d. A tax increase; tax rebates
3. The multiplier concept is important because it shows: Select one: a. why fiscal policy is always effective. b. how small changes in government spending may have large impacts on overall output. c. how changes in taxes are multiplied into larger government revenues. d. why decreases in the tax rate may actually increase tax revenues overall. 1. Which statement is NOT a major limit to the effectiveness of fiscal policy? Select one: a. A single increase in government spending may not be enough to stimulate the economy. b. The crowding out effect is transmitted through financial markets. c. Fiscal policy is not very effective in combating supply side shocks. d. A multiplier effect is associated with changes in spending and taxation.
2. _____ puts more spending in the hands of the private sector, while _____ put more spending in the hands of the government. Select one: a. A tax cut; increased government expenditures b. A tax cut; tax rebates c. Increased government spending; tax cuts d. A tax increase; tax rebates
3. The multiplier concept is important because it shows: Select one: a. why fiscal policy is always effective. b. how small changes in government spending may have large impacts on overall output. c. how changes in taxes are multiplied into larger government revenues. d. why decreases in the tax rate may actually increase tax revenues overall. 1. Which statement is NOT a major limit to the effectiveness of fiscal policy? Select one: a. A single increase in government spending may not be enough to stimulate the economy. b. The crowding out effect is transmitted through financial markets. c. Fiscal policy is not very effective in combating supply side shocks. d. A multiplier effect is associated with changes in spending and taxation.
Select one: a. A single increase in government spending may not be enough to stimulate the economy. b. The crowding out effect is transmitted through financial markets. c. Fiscal policy is not very effective in combating supply side shocks. d. A multiplier effect is associated with changes in spending and taxation.
a. A single increase in government spending may not be enough to stimulate the economy. b. The crowding out effect is transmitted through financial markets. c. Fiscal policy is not very effective in combating supply side shocks. d. A multiplier effect is associated with changes in spending and taxation.
2. _____ puts more spending in the hands of the private sector, while _____ put more spending in the hands of the government. Select one: a. A tax cut; increased government expenditures b. A tax cut; tax rebates c. Increased government spending; tax cuts d. A tax increase; tax rebates
3. The multiplier concept is important because it shows: Select one: a. why fiscal policy is always effective. b. how small changes in government spending may have large impacts on overall output. c. how changes in taxes are multiplied into larger government revenues. d. why decreases in the tax rate may actually increase tax revenues overall. 2. _____ puts more spending in the hands of the private sector, while _____ put more spending in the hands of the government. Select one: a. A tax cut; increased government expenditures b. A tax cut; tax rebates c. Increased government spending; tax cuts d. A tax increase; tax rebates
3. The multiplier concept is important because it shows: Select one: a. why fiscal policy is always effective. b. how small changes in government spending may have large impacts on overall output. c. how changes in taxes are multiplied into larger government revenues. d. why decreases in the tax rate may actually increase tax revenues overall. 3. The multiplier concept is important because it shows: Select one: a. why fiscal policy is always effective. b. how small changes in government spending may have large impacts on overall output. c. how changes in taxes are multiplied into larger government revenues. d. why decreases in the tax rate may actually increase tax revenues overall.
Explanation / Answer
3) ans is B. Multiplier is the changein Income due to change in government spending. K=1/1-mpc
2)ans is B. A tax cut will increase the disposable income and thus increase the expenditure in the hands of private sector whereas increased govt. Expenditure will increase the expensiture in hands of government.
1)ams is D. Multiplier=1/1-mpc
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