5. Refer to the table. The changes in the budget conditions between 1998 and1999 best reflect:Actual budget,Full-employmentbudget, percent of GDP(- deficits; + surpluses) (- deficits; + surpluses)percent of GDPYear19980.1999-32000-52001- 2- 22002+2+1an expansionary fiscal policy.a contractionary fiscal policy.a recession.demand-pull inflation.0 022

Fiscal policy refers to the policy of tax and expenditure of government. Expansionary fiscal policy…

5. Refer to the table. The changes in the budget conditions between 1998 1999 best reflect: * Actual budget, percent of GDP (- deficits; + surpluses) Full-employment budget, percent of GDP (- deficits; + surpluses) Year 1998 - 3 - 5 1999 2000

5. Refer to the table. The changes in the budget conditions between 1998 1999 best reflect: * Actual budget, percent of GDP (- deficits; + surpluses) Full-employment budget, percent of GDP (- deficits; + surpluses) Year 1998 - 3 - 5 1999 2000

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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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.
6. Graphical treatment of taxes and fiscal policy The main difference between variable taxes and fixed taxes is that unlike fixed taxes, variable taxes The following graph shows the consumption schedule for an economy with a given level of taxes. Suppose the government implements a tax increase through a fixed tax. Use two green points (triangle symbol) to connect the two black points (plus symbols) representing the consumption schedule after the change in taxes. Hint: The new consumption schedule must pass through one point on the left and one point on the right. REAL CONSUMER SPENDING (Billions of dollars) 8 40 30 8 0 + + + O + ++ 20 40 60 REAL GDP (Billions of dollars) 80 + O + 100 Consumption with Tax Increase through a Fixed Tax Consumption with Tax Increase through a Variable Tax The blue line on the next graph represents the original total expenditure line for this economy before the change in tax structure. Use the new consumption line you just plotted to calculate the new…
answer quikly read the passeg and answer this question (a) (i) Define “expansionary fiscal policy” using above Malaysia budget 2022article. (ii) Explain the application of “expansionary fiscal policy” using aboveMalaysia budget 2022 article.
3. Budget balances and the national debt The following table lists federal expenditures, revenues, and GDP for the U.S. economy during several years. All numbers are in billions of dollars. Revenues Year (Billions of dollars) 1929 3.9 1948 1967 1986 2005 FEDERAL EXPENDITURES AND RE VENUES (Percent of GDP) 25 20 15 10 41.6 Plot the data for revenues and expenditures as a percentage of GDP on the following graph, rounded to the nearest percent. Use the orange points (square symbol) for expenditures and the green points (triangle symbol) for revenues. Line segments will automatically connect the points. 1929 148.8 769.2 2,153.9 Expenditures GDP (Billions of dollars) (Billions of dollars) 3.1 103.6 1948 29.8 157.5 990.4 2,472.2 1987 YEAR 1986 269.2 2005 832.6 4,462.8 12,421.9 Expenditures Δ Revenues ?
4. Deficits in new classical economics Felix lives in the fictional country of Lindelof, which raises government revenue by taxing everyone the same amount. The government of Lindelof has just implemented a tax cut that reduces annual taxes by $3,500 per person. However, government spending has not changed, nor is it likely change in the future. The tax cut has raised Felix's income by $3,500. If Felix acts according to the prediction of new classical economics (and doesn't plan to leave Lindelof), his consumption is likely to increase by Suppose that instead of cutting taxes while keeping its spending the same, the government did the opposite: it increased its spending by $3,500 per person while keeping taxes the same. If everyone in Lindelof acted like Felix, the likely increase in aggregate demand would be per person.
The question is based on the following information: Item R million 510 540 490 534 Total government revenue Total government expenditure Current government revenue Current government expenditure Non-interest expenditure Cyclically adjusted revenue Cyclically adjusted expenditure The current budget balance is R million. If the balance is negative indicate it using the minus sign in your answer for instance-32 Answer: 500 480 500
5. Let C-120+0.6Y.-140, G-200, T-100. (a) What are government spending multiplier, tax multiplier, and balanced-budget multiplier? (b) What are the output, consumption, saving, and budget deficit at the equilibrium?
Assume that the economy experiences very high increasing energy prices. 1. Explain about what counter cyclical fiscal policy should be used. (Use the macroeconomic approach and include diagram)
4. Primary fiscal surplus refers to: a. private savings b. total savings c. public savings d. trade balance
Consider the following budget scenario in an economy for the year. Budget Estimates Tax Revenue (net to Centre) 215650 Recoveries of Loans 20900 Non-tax revenue 84350 Borrowings and other Liabilities 179100 Total Receipts 500000 Expenditure on Revenue Account 345000 Of which Interest payments 20000 Total expenditure On Capital Account 135000 Total Expenditure 500000 Calculate : 1. Revenue Deficit 2. Fiscal Deficit 3. Primary deficit b. Explain in brief the impact of the following: The government of India decides to finance the widening fiscal deficit by raising more debt from the private institutions/individuals . What is this impact known as ? Explain.
1. The government expenditure multiplier is the effect of a change in government expenditure (G) on goods and services: a. An increase in aggregate expenditure increases aggregate demand (AD), which increases real GDP, which induces an increase in consumption expenditure (C), and which further increases aggregate demand (AD). b. An increase in aggregate expenditure increases aggregate supply (AS), which increases real GDP, which induces an increase in consumption expenditure (C), and which further increases aggregate supply (AS). c. An increase in aggregate expenditure decreases aggregate demand (AD), which decreases real GDP, which induces an decrease in consumption expenditure (C), and which further decreases aggregate demand (AD). d. An increase in aggregate expenditure decreases aggregate supply (AS), which decreases real GDP, which induces an decrease in consumption expenditure (C), and which further decreases aggregate supply (AS). 2. How do banks create money? Group of…
Based on this model, the budget deficit leads to in the level of investment and in the interest rate. Which of the following arguments might a supporter of a balanced budget make in defense of their position? Check all that apply. An individual's share of the government debt represents only a small portion of his or her lifetime earnings. Budget deficits decrease national saving. Budget deficits increase national saving. Budget deficits place a burden on future taxpayers. Supporters of a balanced budget claim that the government's budget deficit cannot grow forever, but critics believe that this is not necessarily true. They argue that what matters is the size of debt relative to national income. For example, suppose that real output in the United States grows at approximately 6%. If the inflation rate is 3% per year, this means that nominal income must be growing at a rate of % per year. Because nominal income grows over time, the nation's ability to pay back the national debt than…