13. Which fiscal policy would make a budget surplus larger or a budget deficit smaller?O lower taxesO increase in government purchases of goods and servicesO lower government transfersO higher interest rates

The policies implemented by the government authorities of a country to control public spending and…

13. Which fiscal policy would make a budget surplus larger or a budget deficit smaller? O lower taxes increase in government purchases of goods and services lower government transfers higher interest rates

13. Which fiscal policy would make a budget surplus larger or a budget deficit smaller? O lower taxes increase in government purchases of goods and services lower government transfers higher interest rates

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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13. Which fiscal policy would make a budget surplus larger or a budget deficit smaller?
O lower taxes
O increase in government purchases of goods and services
O lower government transfers
O higher interest rates

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A Moving to another question will save this response. Question 23 Fiscal policy can move us to equilibrium at Full Employment by O a. these are all possible fiscal policies to bring us to full employment. O b. bailing out troubled industries with special subsidies like the "paycheck protection" during the pandemic. O c. making changes in G, net government spending. O d. changing tax rates people have to pay. A Moving to another question will save this response. tab 1 Q ABA 2 W E R T
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2. Assume a given economy has an equilibrium GDP of $360 billion. A. If government spending and taxes both increase by $40 billion, determine the new equilibrium GDP. B. If both G and taxes increase by $40 billion, what impact will these two changes happening at the same time have on the budget? In other words, will these two changes cause a surplus, a deficit, or a balanced budget? C. Solve for the numerical value of the balanced budget multiplier.
10. Agreements and disagreements among economists regarding fiscalpolicy Consider a hypothetical economy in which households spend $0.75 of each additional dollar of their after-tax income. The expenditure multiplier for this economy is Suppose that this economy is experiencing a recession. The government would like to stimulate aggregate demand and is deciding whether it should increase its spending by $1 billion or reduce income tax by $1 billion. Assume other things remain constant, and the marginal propensity to consume remains at 0.75. Before any multiplier effect takes place, a $1 billion increase in government spending will increase the aggregate demand by s $1 billion reduction in income tax will increase the aggregate demand by billion, while a billion. Now consider the effect of each fiscal policy after the multiplier effect is complete. A $1 billion increase in government spending will result in a total increase of aggregate demand by $ billion, whereas a $1 billion…
The government budget constant for an economy is given below: G + TRị + rDt-1-7; = D¿ – Di-1 where G = government spending, TR is transfer payments, rD;-1 is interest payments on public debt, T is tax revenue and D is the stock of public debt. According to the government budget constraint in what way (or ways) can government expenditures be funded? O a. by a combination of tax revenue and borrowing from the public O b. by printing money O c. by tax revenue O d. by borrowing from the public O e. by borrowing from the central bank
4. Study Questions and Problems #4 Evaluate the following statement. True or False: The most unlikely problem of the national debt is that the government will go bankrupt. True, because the government surplus is always growing. True, because the U.S. Treasury can roll over the debt by issuing new securities. False, because when government securities mature, the U.S. Treasury will default on its obligations. O False, because the government deficit is always growing.
Assume that the economy is in a recession and the government is experiencing a budget deficit. What happens if balanced-budget fiscal policy is used to eliminate the deficit? O a. Unemployment will fall. O b. GDP will rise. O c. The deficit could be eliminated if GDP rose. d. Government spending will fall. P NTR will remain unchanged.