9- When expectations are taken into account, a policy to reduce budget deficit may not lead to a fall in output in thecurrent period. Which of the followings cannot be listed as factor that offsets the detrimental impact of fiscalcontraction on the output in the short run?a) O Increasing tax rates harshly to finance deficit.b) O Credibility of the deficit reduction program.c) O Cutting wasteful spending and leaving room for future tax cuts.d) O Backloading the deficit reduction, leaving larger cuts in government spending to the future while only small cutstoday.11 - Suppose government implements an unexpected tax increase. However, as a result of that unexpected fiscalcontraction, the central bank worries about "recession" and plans to respond that by reducing the policy rate. Giventhis information, we would expect thata) Oif output remain unchanged, this policy will have an ambiguous effect on stock prices.b) O if output remain unchanged, stock prices will rise.c)O if output remain unchanged, stock prices will remain constant.d) O if output remain unchanged, stock prices will decrease.

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9- When expectations are taken into account, a policy to reduce budget deficit may not lead to a fall in output in the current period. Which of the followings cannot be listed as factor that offsets the detrimental impact of fiscal contraction on the output in the short run? a) O Increasing tax rates harshly to finance deficit. b) Credibility of the deficit reduction program. C)O Cutting wasteful spending and leaving room for future tax cuts. d) O Backloading the deficit reduction, leaving larger cuts in government spending to the future while only small cuts today.

9- When expectations are taken into account, a policy to reduce budget deficit may not lead to a fall in output in the current period. Which of the followings cannot be listed as factor that offsets the detrimental impact of fiscal contraction on the output in the short run? a) O Increasing tax rates harshly to finance deficit. b) Credibility of the deficit reduction program. C)O Cutting wasteful spending and leaving room for future tax cuts. d) O Backloading the deficit reduction, leaving larger cuts in government spending to the future while only small cuts today.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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True or False: Negative debt always carries a high interest rate and high fees. O True O False
K Because in the government budget deficit increase the real interest rate, budget deficits can O A. decreases; increase OB. increases; increase OC. decreases; decrease O D. increases; decrease firm investment. Note:- Please avoid using ChatGPT and refrain from providing handwritten solutions; otherwise, I will definitely give a downvote. Also, be mindful of plagiarism.Answer completely and accurate answer.Rest assured, you will receive an upvote if the answer is accurate.
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