and5. Fiscal policy unil vaggregate supplySuppose the government decides to stimulste economic growth by iveting in action, receying dem in the exatomy remains the same.Show the intended short-run effect of this fiscal policy on aggregate supply by shutting the short-run aggregate supply: (SRAS) canze.Note: Select and drag one or both of the curves to the desired position. Curves will shop into positiven, so if you try to move & Curve werf, & props backto its original position, just drag it a ittle fartherREAL GOPEvit

Since the prompt specifically asks to show the effect on the SRAS curve, you can demonstrate this by…

Answered: and 5. Fiscal policy unil vaggregate…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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4.
10 If Ricardian equivalence holds, and the marginal propensity to consume (MPC) is 0.75, What is the effect of a $100 reduction in taxes on aggregate demand (AD) ?
6. The discretionary fiscal policy initiatives adopted in 2009 were intended mainly to ECOM A. increase aggregate supply. B. increase aggregate demand. C. decrease aggregate supply. balat 800S nhub.aDet D. decrease aggregate demand
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
Don't answer by pen paper and don't use chatgpt otherwise we will give dounvote
60. Assume a recessionary gap of $300 B exists in the U.S. macroeconomy. Also assume that the MPC .80. How much do taxes need to change and do the change in taxes represent an increase or a decrease? (Use simple multiplier formula) A. $100 B, increase B. $300 B, increase C. $75 B, decrease D. $62 B, increase
The graph below depicts an economy where a decline in aggregate demand has caused a recession. Assume the government decides to conduct fiscal policy by increasing government purchases to reduce the burden of this recession. Price Level 160 140 LA 120 100 80 60 40 20 0 Fiscal Policy LRAS AD₁ Real GDP (billions of dollars) billion AS 80 160 240 320 400 480 560 640 720 800 AD O Instructions: Enter your answers as a whole number. a. How much does aggregate demand need to change to restore the economy to its long-run equilibrium? billion B b. If the MPC is 0.6, how much does government purchases need to change to shift aggregate demand by the amount you found in part a? Suppose instead that the MPC is 0.75. c. How much does aggregate demand and government purchases need to change to restore the economy to its long-run equilibrium? Aggregate demand needs to change by $ billion and government purchases need to change by $ billion.
What could cause the following shift? O Increase in GDP. O Expansionary fiscal policy. O Decrease in future MPK. All of the above. FE IS LM
An economy is currently in a short-run equilibrium at point a. Which fiscal policy action would MOST likely bring the economy back to full employment output? LRAS SRAS Aggregate Price Level (P) Aggregate Output (Q) increase in taxes decrease in interest rates increase in government spending O increase in transfer payments ADO 自 ˊˋ
Given an upward-sloping short-run AS curve, expansionary fiscal policy (ceteris paribus) will result in: (i) Higher prices in the short run (ii) Higher output in the short run (iii) Higher prices in the long run (iv) Higher output in the long run O a. Only (i) and (ii) O b. Only (iii) and (iv) O c. Only (ii) and (iii) O d. Only (i) and (iv)
If aggregate demand
8

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