Analyse how and why bond and share prices will be affected by an unexpected fiscal expansion.

Q: A government surplus can decrease investment through the crowding-out effect because the surplus…

A: A government surplus can decrease investment through the crowding-out effect because the surplus…

Q: Explain three issues with the funding gap management.

A: Concept of Funding gap A funding gap - the total quantity of money necessary to finance a firm's or…

Q: Will Increase in government spending financed by borrowing help promote a strong recovery from a…

A: A recession is a period of an economic downturn that is caused due to the depletion of aggregate…

Q: Should fiscal policy encourage more consumption or more saving? Does it matter? I need a reason why.

A: The fiscal (F) and monetary (M) policies help to control and maintain economic fluctuations such as…

Q: What policy might the federal government implement with regard to taxes and spending to help stop…

A: Fiscal policy refers to the changes in the federal government purchases and taxes, which are…

Q: How does minimizing business or personal debt help prevent bankruptcies in a recession?

A: Business and personal debt refers to the borrowing by the people to do business or personal…

Q: If I had a federal budget that was typically balanced where new taxes causes $100 billion surplus.…

A: The federal budget is an itemized plan for the United States' yearly public spending. It is used to…

Q: Do you agree that the increase in national debt of the country have an effect to the growth of the…

A: Country seeks Debt to finance the deficit budget or repayment debt . This helps to expand the size…

Q: What does the Fisher Effect tell us about the bond and loanable funds markets?

A: In classical economics, the equilibrium interest rate in the economy is determined in the loanable…

Q: Explain what effect a large federal deficit might have on interest rates?

A: The deficit in the budget arises when the government faces higher government spending with lesser…

Q: If the president and parliament agree on a policy to reduce the budget deficit by increasing taxes…

A: If the government deicides to adopt a contractionary fiscal policy by increasing the taxes,…

Q: When the expected profit​ ________, investment demand​ ________ and the demand for loanable funds…

A: The loanable funds market refers to the interaction between lenders (savers) and borrowers…

Q: What phenomenon suggests that increasing government borrowing may Increase Investment and hence…

A: The objective of the question is to identify the economic phenomenon that suggests that an increase…

Q: Explain the meaning of convexity. Critically explain why investors would prefer a bond with higher…

A: Convexity is defined as the measure of the degree of the curve or the curvature, in the relationship…

Q: Give two examples each of revenue eceipts and capital receipts in a financial pudget.

A: According to the given question Financial budget in economics is known as a budget which predicts…

Q: Fiscal policy can affect the rental cost of capital. true or false?

A: Fiscal policy is the use of government spending and taxation by the government to influence the…

Q: How is the Social Security system currently influencing the size of the budget deficit? If it is not…

A: The budget deficit creates the problem in the economy. When there is budget deficit, it will leads…

Q: Explain how government borrowing affect interest rate in the market. What impact such change in…

A: The fiscal deficit occurs when government spending exceeds government receipts. The government…

Q: Identify how planned investment will change in each scenario.   In an effort to reduce constant…

A: To identify the change in planned investments.

Q: The flow of funds into and out of the different sectors of the economy results to a particular…

A: When talking about flow of funds, it explains the movement of funds or goods and services from one…

Q: Is it possible to assume there is crowding out as well with a formula? If there was crowding out of…

A:

Q: )Which of these methods of government deficit finance is MOST likely to crowd out private…

A: Government budget deficit: - Government budget deficit is the condition in which the government…