31 Jan domestic household

KNOWLEDGE CHECK 9

Question 1

A(n) ________________________________ is calculated as a flat percentage of income earned, regardless of level of income.

progressive tax

regressive tax

proportional tax

estate and gift tax

Question 2

Which of the following terms is used to describe the set of policies that relate to government spending, taxation, and borrowing?

financial policies

monetary policies

fiscal policies

economic policies

Question 3

A(n) __________________________ policy will cause a greater share of income to be collected from those with high incomes than from those with lower incomes.

proportional tax

regressive tax

progressive tax

excise tax

Question 4

What do goods like gasoline, tobacco, and alcohol typically share in common?

A progressive tax is imposed on each of them.

A regressive tax is imposed on each of them.

They are all subject to government excise taxes.

They are all subject to government fiscal taxes.

Question 5

_____________________ are a form of tax and spending rules that can affect aggregate demand in the economy without any additional change in legislation.

Standardized employment budgets

Discretionary fiscal policies

Automatic stabilizers

Budget expenditures

Question 6

When the interest rate in an economy decreases, it is most likely as a result of:

an increase in the government budget surplus or its budget deficit.

a decrease in the government budget surplus or its budget deficit.

an increase in the government budget surplus or a decrease in its budget deficit.

a decrease in the government budget surplus or an increase in its budget deficit.

Question 7

When governments are borrowers in financial capital markets, which of the following is least likely to be a possible source of the funds from a macroeconomic point of view?

central bank prints more money

increase in household savings

decrease in borrowing by private firms

foreign financial investors

Question 8

A __________________ often results in an outflow of financial capital leaving the domestic economy and being invested in the global economy.

trade surplus

trade deficit

fiscal deficit

twin surplus

Question 9

From a macroeconomic point of view, which of the following is a source of demand for financial capital?

savings by households and firms

foreign financial investment

domestic household private savings

government borrowing

Question 10

The U.S. economy has two main sources for financial capital: _______________________ and ____________________________.

private savings from U.S. households and firms; inflows of foreign financial investment

private sector investment; government borrowing

private savings from U.S. households and firms; government borrowing

private sector investment; inflows of foreign financial investment from abroad