An expansionary fiscal policy: (Select All that Apply) Helpful Hint: There are 4 correct answers. O may increase the Gross Federal Debt. may include decreases in taxes. O may include increases in taxes. O usually decreases a government budget deficit or increases a government budget surplus. O goal is to achieve a balanced budget. O may include increases in government purchases. O may include decreases in government purchases. O usually increases a government budget deficit or decreases a government budget surplus.

An expansionary fiscal policy: (Select All that Apply) Helpful Hint: There are 4 correct answers. O may increase the Gross Federal Debt. may include decreases in taxes. O may include increases in taxes. O usually decreases a government budget deficit or increases a government budget surplus. O goal is to achieve a balanced budget. O may include increases in government purchases. O may include decreases in government purchases. O usually increases a government budget deficit or decreases a government budget surplus.

ECON MACRO

5th Edition

ISBN:9781337000529

Author:William A. McEachern

Publisher:William A. McEachern

Chapter11: Fiscal Policy

Section: Chapter Questions

Problem 1.7P

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CIENCES QUESTION 1 Study the bar chart regarding the National Budget's tax revenue and answer the questions that follow: WHERE WILL THE MONEY COME FROM IN 2021/22 AND HOW WILL IT BE SPEND GOVERNMENT SOURCES OF REVENUE 2021/22 Tax R1 365.1milj 72.6% Loans R 482.6milj 25.7% Non-tax income R 32.5milj 1.7% 1 Which revenue contributes the most to the National Budget? Give the percentage. Which revenue contributes the least to the National Budget? Give the percentage. Give ONE example of a income that is not tax. TAX REVENUE, 2 021/22 Personal inseme tax
Question 18
47. The federal government runs a budget surplus when Group of answer choices the economy is in a recession it buys back fewer bonds than it issues it spends more than it receives in tax revenues it spends less than it receives in tax revenues
Part A Decide whether each of the following fiscal policies of the federal government is expansionary or contractionary. Write expansionary or contractionary, and explain the reasons for your choice. 1. The government cuts business and personal income taxes and increases its own spending. Expansionary. The decrease in personal income taxes increases disposable income and thus increases consumption spending. The business tax cut increases investment spending, and the increase in government spending increases government demand. 2. The government increases the personal income tax , Social Security tax and corporate income tax Government spending stays the same 3. Government spending goes up while taxes remain the same. 4. The government reduces the wages of its employees while raising taxes on consumers and businesses Other government spending remains the same
11.1 Due to the pandemic, the federal government announced many measures to help those negatively affected. The budget deficit surged to more than $300 billion. What is the fiscal stance of the federal government's recent budaet policy? Neutral Expansionary Contractionary
11
Question 16 If the economy is in stagflation, what would eventually happen as a result if no fiscal policy is used and the economy adjusts back to full employment? Prices would increase and unemployment would increase O Prices would increase and unemployment would fall Prices would fall and unemployment would increase Prices would fall and unemployment would fall
2. Fiscal policy Suppose a hypothetical economy is currently in a situation of deficient aggregate demand of $64 billion. Four economists agree that expansionary fiscal policy can increase total spending and move the economy out of recession, but they are debating which type of expansionary policy should be used. Economist A believes that the government spending multiplier is 8 and the tax multiplier is 4. Economist B believes that the government spending muitiplier is 4 and the tax multiplier is 2. Compute the amount the govermment would have to increase spending to close the output gap according to each economist's belief. Then, for each scenario, compute the size of the tax cut that would achieve this same effect. Policy Options for Closing Output Gap Increase in Spending Таx Cut Spending Multiplier Tax Multiplier (Billions of dollars) (Billions of dollars) Economist A Economist B Economist C favors tax cuts over increases in government spending. This means that Economist C likely…