A Moving to another question will save this response. Quèstion 7 Which of the following fiscal policy changes would be the most contractionary? O A. a $40 billion increase in taxes. O B. a $30 billion increase in taxes and a $10 billion cut in government spending. O C. a $20 billion increase in taxes and a $20 billion cut in government spending. O D. a $10 billion increase in taxes and a $30 billion cut in government spending. 1 A Moving to apother auastion will save this resnonse

A Moving to another question will save this response. Quèstion 7 Which of the following fiscal policy changes would be the most contractionary? O A. a $40 billion increase in taxes. O B. a $30 billion increase in taxes and a $10 billion cut in government spending. O C. a $20 billion increase in taxes and a $20 billion cut in government spending. O D. a $10 billion increase in taxes and a $30 billion cut in government spending. 1 A Moving to apother auastion will save this resnonse

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Asap both 1.a) Which of the following statements is correct?l.Expansionary fiscal policy is used to remove a recessionary gap.ll. Expansionary fiscal policy is used to shift AD right.A) l onlyB) I onlyC)both I and ID) neither I nor ll 1.b) Which of the following are examples of contractionary fiscal policy?A) decreasing government expendituresB) increasing taxesC) increasing transfer paymentsD) A and B are both contractionary fiscal policiesE) A, B, and C are all contractionary fiscal policies
Hi, Could you help me solve this problem attached as an image?
Refer to the figure at right. Government policy that moved the economy from A to B would be accomplished by O A. an expansionary fiscal policy combined with a contractionary monetary policy. O B. OC. a contractionary fiscal policy combined with an expansionary monetary policy. a contractionary policy that would reduce the rate of inflation and would cause workers to remain unemployed longer than they were before. O D. raising the minimum wage. Inflation Rate 2.5 A B I 6 D Unemployment Rate
Always use economic terms, diagrams. "Counter-cyclical fiscal policy works. If consumers and businesses lose confidence because of the changing world, the government can fix this economic problem - that is what the Biden $1.9 trillion stimulus was all about. Sure, there might be some issues with the deficit, but given a recovery, the government can pay that deficit off. Also, since we are in a very inflationary period again we might expect counter-cyclical fiscal policy to resolve some of the debt issues." Please explain this comment. (Hint: don't forget to use an AS AD diagram and possibly a business cycle diagram).
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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…
Today the federal government collects nearly O $1 billion a year in tax revenues. O $500 billion a year in tax revenues. O $1 trillion a year in tax revenues. O $4 trillion a year in tax revenues.
TRUE - OR - FALSE A federal budget surplus occurs when government expenditures exceed tax revenues. O True O False
3 Question 2 Given the following information: 1= 150, G = 150, T-150 and C= 150 +0.75(Yd) O At least 2 of the choices 75 is the fiscal multiplier O 25% is the marginal propensity to save O Equilibrium Aggregate Expenditure will increase by 400 if gov't spending is increased by 100?
Suppose the stock of government debt in Canada at the end of one fiscal year is $482 billion. If the stock of debt rises to $501 billion by the end of the next fiscal year, then we know that in that year O A. the government had a primary budget deficit of $19 billion. O B. the government had a primary budget surplus of $19 billion. OC. the government had an overall budget deficit of S$19 billion. D. the government had an overall budget surplus of $19 billion.
Suppose the government incurs more debt to finance new military spending. To what extent will this impose a burden on future generations? O a. Government spending on military is considered investment expenditure. O b. Military spending does not at all benefit the future generations. O c. Government spending crowds out private investment spending. O d. Government debt needed to finance military expenditures is held by domestic entities.
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