1- Assume that the economy starts at an equilibrium output Y*,and interest rate i*. Suggest a policy mix to achieve the following objectives. a) Increase Y while keeping į constant. b) Decrease fiscal deficit while keeping Y constant. c) Government wants to decrease the interest rate while keeping Y constant. (Ctrl) -

1- Assume that the economy starts at an equilibrium output Y,and interest rate i. Suggest a policy mix to achieve the following objectives. a) Increase Y while keeping į constant. b) Decrease fiscal deficit while keeping Y constant. c) Government wants to decrease the interest rate while keeping Y constant. (Ctrl) -

ECON MACRO

5th Edition

ISBN:9781337000529

Author:William A. McEachern

Publisher:William A. McEachern

Chapter11: Fiscal Policy

Section: Chapter Questions

Problem 1.7P

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7) Suggest a policy mix to achieve the following objectives: a. Increase Y while keeping i constant. b. Decrease the fiscal deficit while keeping constant. What happens to i? To investment?
4. Consider the following demand and supply schedules of loanable funds. All figures are in billion dollars. Assume zero budget deficits and a closed economy. a. Interest Rate 12% 10% 8% 6% 4% 2% Quantity of Funds Demanded $200 $300 $400 $500 $600 $700 Determine the following equilibrium outcomes: (1) The interest rate. (ii) Private savings. (iii) Government (public) savings. (iv) Private business investment. Quantity of Funds Supplied $1000 $900 $800 $700 $600 $500
part C D i need in words not handwritten solution please
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Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
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component of the budget. 3ldentify the impact that each of the following changes in fiscal policy would have on the level of economic growth. a) A reduction in the budget deficit from $200 billion last year to $150 billion this year b) An unchanged budget surplus of $12 billion last year and this year c) A shift from a $15 billion deficit last year to a balanced budget this year. PrtScn F8 Home F9 F7 F6 F5 近

1. Fiscal Policya. Assume the Economy has an inflationary gap with above average price level, demonstrate this graphically and explain label the short run gdp with A.b. If the US has an MPC of 75% and the government decides to increase spending on social programs by $150 billion, what will happen to GDP (Y) and Price level (P) in the Short Run? Demonstrate and Explain. Label this point B.c. What Fiscal Policy should the Government implement (why?)? What Choices do they have? What will be the effects of this policy on the GDP? Demonstrate and Fully explain (hint: explain the steps as outlined in class)
6. Explain the assumptions, main arguments and criticism of the Tiebout model (infavour of fiscal decentralisation).
2. The lowest level of the output gap during the Great Recession was -7.46% in July 2009. (a) Economists estimate the multiplier for the US economy to be 1.5. If this is true, what is ? (b) What would the percent change in government expenditure be to close this gap, assuming monetary policy is not being used?
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