An economist who favored expanded government would recommend: 

        

	tax cuts during recession and tax increases during   inflation.
	tax increases during recession and tax cuts during   inflation.
	tax cuts during recession and reductions in government   spending during inflation.
	increases in government spending during recession and   tax increases during inflation.

 

When current government expenditures exceed current tax revenues and the economy is achieving full employment:

         

	the cyclically adjusted budget has a surplus.
	fiscal policy is contractionary.
	the cyclically adjusted budget has a deficit.
	the cyclically adjusted budget has neither a deficit   nor a surplus.

 

An appropriate fiscal policy for severe demand-pull inflation is:

 

       

	a tax rate increase.
	a reduction in interest rates.
	an increase in government spending.
	depreciation of the dollar.

 

Suppose the government cuts taxes to keep the economy's cyclically adjusted budget in balance when the economy is expanding. The government is engaging in a(n):

         

	neutral fiscal policy.
	low-interest-rate policy.
	expansionary fiscal policy.
	contractionary fiscal policy.

 

The public debt is held as: 

       

	Treasury bills, Treasury notes, Treasury bonds, and   U.S. savings bonds.
	U.S. securities, corporate bonds, and common stock.
	Federal Reserve Notes.
	U.S. gold certificates.