2. Jeopardy! TaxesFiscal Policy Fiscal Policy Types Irresponsible Spending Government Spending and Investment Alex Trabeconomics 100 200 300 400 500

3. An increase in taxes will change aggregate demand in which way?

4. Decrease

5. A tax that charges the poor a larger percent of their income than the rich may be described as thisA tax that charges the poor a larger percent of their income than the rich may be described as this.

6. Regressive tax

7. A tax which does not vary with level of GDP

8. Fixed tax

9. A change in a fixed tax will simply shift the consumption function. However, an increase in a variable tax will affect the consumption function in what way?

10. Flatten

11. If MPC =.75, the tax rate is 20%, and you receive a $1000 bonus at work, how much will you spend?

12. $600

13. The government’s plan for spending and taxation which is designed to steer aggregate demand in some direction

14. Fiscal Policy

15. A feature of the economy that reduces sensitivity to shocks

16. Automatic stabilizer

17. If taxes and government spending increase the exact same amount ($200 Billion), what will happen to GDP?

18. Increase by $200 Billion

19. In an economy with an income tax, the multiplier is likely to be ________ than without the tax.

20. Smaller

21. The multiplier for a change in taxes is _______ the multiplier for a change in government spending

22. Smaller than

23. (Automatic/Discretionary): Congress provides a one-time tax rebate to all tax payers.

24. Discretionary

25. (Automatic/Discretionary): Tax revenue increases as an improving stock market leads to increasing capital gains

26. Automatic

27. (Expansionary/Contractionary) (Automatic/Discretionary): Congress votes to build a new interstate highway.

28. Expansionary, Discretionary

29. (Expansionary/Contractionary) (Automatic/Discretionary): Congress votes to create an expanded unemployment insurance program

30. Discretionary, Expansionary

31. (Expansionary/Contractionary) (Automatic/Discretionary): Congress cuts funding to the National Teapot Museum, and uses the funds saved to increase transfer payments to Snapple, Inc.

32. Contractionary, Discretionary

33. This occurs when expenditures exceed revenue over a given period of time.

34. Deficit

35. This is the sum of deficits over time.

36. Debt

37. _______ describes a deficit the government incurs at full employment.

38. Structural deficit

39. When unemployment is high the government’s actual deficit will be _____ than the structural deficit.

40. Higher

41. The group to which the federal government owes the largest portion of its debt.

42. The federal government.

43. Large deficits tend to lead to higher/lower interest rates.

44. Higher

45. This describes the situation in which higher government spending leads to less (I).

46. Crowding out.

47. Low interest rates will lead the production possibilities frontier to do this in the future.

48. Shift right.

49. DAILY DOUBLE!

50. _______ results from increased government spending when the available supply of loanable funds is high.

51. Crowding in

52. Assume the government runs a structurally balanced budget. If unemployment is high what will resulting budget balance be?

53. Cyclical deficit

54. Increased government spending which limits (I)/This duo scored a big hit with their album “Speakerboxx/The Love Below”Increased government spending which limits (I)/This duo scored a big hit with their album “Speakerboxx/The Love Below”

55. Crowding Outkast

56. This rapper has starred in the movies “The Italian Job” and “The Hitchhiker’s Guide…”/A government runs this when spending exceeds revenue.This rapper has starred in the movies “The Italian Job” and “The Hitchhiker’s Guide…”/A government runs this when spending exceeds revenue.

57. Mos Deficit

58. The government’s plan to steer the economy by manipulating spending and taxes / He’s a starting pitcher for the Yankees

59. Fiscal Poli-C.C. Sabathia

60. A one-time fiscal policy may be described as this / Chris Brown was arrested for an alleged altercation with his then girlfriend, this performer

61. Discretiona-Rihanna

62. DAILY DOUBLE!

63. A deficit that occurs at full employment / Orson Welles’ most famous film – number one on AFI’s 100 greatest movies of all time.

64. Structural Defi-Citizen Kane