1.Define/explain the following:

a.What are the three goals of fiscal policy?

b.Discretionary Fiscal Policy

c.What the Laffer curve shows.

d.Automatic fiscal policy

2.List the:

a.Sources of U.S. tax revenue in order, largest to smallest.

b.List the categories of federal government outlays from largest to smallest.

Component Dollars (billions) Personal income taxes 950 Social Security taxes 400 Corporate income taxes 200 Indirect taxes Transfer payments 50 1000 Expenditures on goods and services 500 Debt interest 300 \fYear Government Tax Revenues (billions) Government expenditures (billions) 1 4200 4400 2 4600 4500 3 4700 4700 4 4500 4400 5 4000 4300