Based on your understanding of the multiplier effect and the crowding-out effects, do you think that fiscal policy can be effective

Q: If government policy makers were worried about the inflationary potential of the economy, which of…

A: When government worried about inflation, it can use contractionary fiscal policy to reduce the…

Q: Why is crowding out an important issue in the debate over the use of fiscal policy?

A: Crowding out effect is an economic situation where interest rates are increased. This ends up  in…

Q: What is an expansionary gap? What fiscal policy might close that gap?

A: Answer: Introduction: Expansionary gap: when the actual output level exceeds the potential output…

Q: How could fiscal policy alleviate the problem? What specific policy changes would be needed?

A: Everything involving public funding or taxes is referred to as fiscal. Fiscal policy refers to how…

Q: Under what conditions is expansionary fiscal policy the most effective at increasing output? Why?

A: Expansionary fiscal policy is the policy which is to be used to push back the equilibrium normal…

Q: Explain the effectiveness of the fiscal policy in economics.

A: The fiscal policy is the means by which the public power changes its spending and pay to influence…

Q: Why do you think that expansionary fiscal policy can fail during a recession?

A: Recession is a situation in the economy, when there is general decline in the economic activity. For…

Q: What is the main advantage of automatic stabilizers over discretionary fiscal policy?

A: Fiscal policy(FP) tools can be implemented in two types that are automatic stabilizers and…

Q: Right now many economies in the world are experiencing a downturn due to the Corona Virus. a) What…

A: Hello, thank you for the question. Since there are multiple subpart questions posted here, only the…

Q: What are the reasons of fiscal policy not being effective in an economy according to classical…

A: The classical theory focuses on free markets and that the markets will regulate themselves when they…

Q: Why do critics charge that fiscal policy has a “big-government bias”?

A: Answer-Fiscal policy is the notion that government should actively stimulate the economy in bad…

Q: List what specific, deliberate actions the federal government could take to enact expansionary…

A: Expansionary fiscal policy is aimed at increasing aggregate demand when the economy is in a…

Q: How relevant is the multiplier concept to the implementation of expansionary and contractionary…

A: Spending multiplier: - it is a fraction that shows the magnitude of the change in national income…

Q: How relevant is the multiplier concept to the implementation of expansionary and contractionary…

A: The factor that shows either an increase or decrease in the base value is denoted by a multiplier.…

Q: Who is in charge of fiscal policies, and how do their different multipliers work?

A: The fiscal policy is the use of the government budget to affect an economy. when the government…

Q: Why do Republicans like tax cuts? Why are tax cuts a good thing? How does it affect the aggregate…

A: Answer -  We can not generalise that Republicans like tax cut or not but long line of US presidents…

Q: In preparing their estimates of the stimulus package's effect on GDP, Obama administration…

A: The government purchases multiplier can be affected by a number of factors, including: The…

Q: What is classes as an expansionary fiscal policy?

A: Fiscal policy is the government-imposed policy used to change economic conditions like demand,…

Q: Describe how expansionary fiscal policy can fail during a recession.

A: Fiscal policy refers to the policy taken by the government to influence the economy of a nation. The…

Q: Explain how fiscal policy can be implemented if an economy is in the downswing of a business cycle.

A: Fiscal policy is tools available to the central government to mitigate the economic consequence by…

Q: Identify the effects of fiscal policy on the economy

A: Fiscal policy refers to the government policy that stabilizes th economy through bring changes in…

Q: Why is getting the magnitude, or dollar size, of the policy change just right the most difficult…

A: Discretionary fiscal policy is a government policy used for raising the aggregate demand/ spending…

Q: What type of fiscal policy would be appropriate to use during a recessionary period?  How might this…

A: Fiscal policy refers to changes in government spending and taxes

Q: Explains in detail fiscal policy, its role, and its effects on short-term and long-term economic…

A: Fiscal Policy: The Fiscal Policy is the revenue and expenditure policy of the government to…