2. The graph below shows the AD-AS diagram for Canada.1200+1100+1000AD900 -800700+600+50KRAS400300+200100+TRAS100 200 300 400508 600 700 800 9001000I 10' 20Real GDPWhat type of fiscal policy should the government of Canada be implementing to bring theeconomy to the long-run equilibrium (select one)?a. There is no need for either contractionary or expansionary fiscal policy.b. The government should implement expansionary fiscal policy.c. The government should implement contractionary fiscal policy.Price Level

The point at which aggregate demand and aggregate supply intersects is the point at which the actual…

2. The graph below shows the AD-AS diagram for Canada. 1200+ 1100+ 1000 AD 900 800 - 700+ 600 + 50KRAS 400 300- 200 - 100+ TRAS 100 200 30Q 400500 600 700 800 9001000I 100 20 Real GDP What type of fiscal policy should the government of Canada be implementing to economy to the long-run equilibrium (select one)? a. There is no need for either contractionary or expansionary fiscal policy. b. The government should implement expansionary fiscal policy. c. The government should implement contractionary fiscal policy. Price Level

2. The graph below shows the AD-AS diagram for Canada. 1200+ 1100+ 1000 AD 900 800 - 700+ 600 + 50KRAS 400 300- 200 - 100+ TRAS 100 200 30Q 400500 600 700 800 9001000I 100 20 Real GDP What type of fiscal policy should the government of Canada be implementing to economy to the long-run equilibrium (select one)? a. There is no need for either contractionary or expansionary fiscal policy. b. The government should implement expansionary fiscal policy. c. The government should implement contractionary fiscal policy. Price Level

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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1. Suppose the economy has fallen into a recession (output level ?0), and the federal government wants to return the economy to its original level of output (?). Respond to each of the following questions using appropriate diagrams and explanations.(a) If policy makers can only use fiscal tools, what should they do?(b) If policy makers can only use monetary tools, what should they do? (c) What should they do if they want to return output to its original level but keep investment from changing?
3. Explain how expansionary fiscal policy can close a recessionary gap using an appropriate diagram. Note: Use the following terms. They are: Long-run aggregate supply curve (LRAS). short-run aggregate supply curve (SRAS), Aggregate demand (AD). Real GDP price level. potential GDP, etc.
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Question 18/28 > NEXT A BOOKMARK 18 According to the pie chart, which of the following provides the most revenue for the federal government? Federal Tax Revenue 2015: $3.18 trillion Corporate Inco Taxes Miscellaneous Individual Income Taxes Excise Taxes $1.48 trillion 47% Customs Duties Payroll Taxes $1.07 trillion 34% nationalpriorities.org PRIORITIES A Individual income taxes B Corporate taxes C Payroll taxes D Excise taxes DELL -> @ # $ 7 8. 1 4 W e y < O 5
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The graph below depicts an economy where an increase in aggregate demand has caused inflation. Assume the government decides to conduct fiscal policy by decreasing government purchases to restore full-employment GDP. Price Level 180 160 140 120 100 80 60 40 20 0 Fiscal Policy LRAS AS AD AD, 100 200 300 400 500 600 700 800 900 1000 Real GDP (billions of dollars) Instructions: Enter your answer as a whole number. If you are entering a negative number include a minus sign. a. How much does aggregate demand need to change to restore the economy to its long-run equilibrium? $ (200) billion b. If the MPC is 0.75, how much does government purchases need to change to shift aggregate demand by the amount you found in part a? $ (50) → billion Suppose instead that the MPC is 0.6. c. How much does aggregate demand and government purchases need to change to restore the economy to its long-run equilibrium? Aggregate demand needs to change by $ (200) billion and government purchases need to change by…
The task I am struggling with: The accompanying diagram shows the current macroeconomic situation for the economy of Albernia. You have been hired as an economic consultant to help the economy move to potential output Yp. a) Is Albernia facing a recessionary or inflaniotary gap? b) Which type of fiscal policy – expansionary or contractionary – would move the economy of Albernia to potential output Yp? What are some examples of such policies? c) Illustrate the macroeconomic situation in Albernia with a diagram after the succesful fiscal policy has been implemented. Thank you very much for your help.
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