7:411E Initial Questions 3 - Spring 2021... •••In GDP.Figure 16-4Price levelSRASLRASAD,AD2Real GDPBonus 1) Refer to Figure 16-4. In the graph above, suppoinitially at point A. The movement of the economy to poingraph illustrates the effect of which of the following policCongress and the president?A) an increase in transfer paymentsB) an increase in interest ratesC) an increase in the marginal income tax rateD) an open market purchase of Treasury bills 7:411E Initial Questions 3 - Spring 2021... •••Figure 15-2InterestMS2MS1rate, i4%3AMDQuantity of money(billions of dollars)90095018) Refer to Figure 15-2. In the figure above, the movepoint B in the money market would be caused byA) an increase in the price level.B) a decrease in real GDP.C) an open market sale of Treasury securities by the FecD) a decrease in the required reserve ratio by the Federa19) Which of the following is an appropriate discretionaequilibrium real GDP falls below potential real GDP?A) an increase in government purchasesB) an increase in the supply of moneyC) an increase in individual income taxesD) a decrease in transfer payments20) Contractionary monetary policy on the part of the FeA) an increase in the money supply, an increase in intereincrease in GDP.B) a decrease in the money supply, an increase in interesin GDP.C) an increase in the money supply, a decrease in interesin GDP.D) a decrease in the money supply, a decrease in interesin GDP.

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Bonus 1) Refer to Figure 16-4. In the graph above, supp initially at point A. The movement of the economy to poi graph illustrates the effect of which of the following poli Congress and the president? A) an increase in transfer payments B) an increase in interest rates C) an increase in the marginal income tax rate D) an open market purchase of Treasury bills

Bonus 1) Refer to Figure 16-4. In the graph above, supp initially at point A. The movement of the economy to poi graph illustrates the effect of which of the following poli Congress and the president? A) an increase in transfer payments B) an increase in interest rates C) an increase in the marginal income tax rate D) an open market purchase of Treasury bills

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Of the four choices below, which causes a shift in the Supply of dollars to the right? A. An expansionary fiscal policy that raised U.S. income and increased U.S. imports.B. An expansionary fiscal policy that raised U.S. income and reduced U.S. imports.C. A contractionary fiscal policy that reduced U.S. income and lowered U.S. imports.D. A contractionary fiscal policy that reduced U.S. income and increased U.S. imports.
13. Suppose that two countries differ on in the size of their MPC, where the MPC is high in country A and low in country B. Draw IS/LM and AD/AS curves for each country. In which country will monetary policy be most effective at changing income? Fiscal policy?
Suppose the economy begins at full employment. Label this starting point as point "1." Then, suppose that a long strike by coal miners reduces the coal supply and increases the price of coal. Show the effects on your graph and label the new equilibrium point "2." Lastly, suppose our government wants the economy to return to full-employment as quickly as possible. Should the government intervene? If so, show the impact of successful fiscal policy on your graph. Label this new equilibrium point "3."
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can you explain this for me? this is a true or false statement: "increasing welfare payments by borrowing the money to fund them would increase AD" borrowing the money means we will have more deficit and interest to repay. But wouldnt it still stimulate the economy nonetheless?
ALL QUESTIONS GO WITH BOTH CHARTS 6. Focusing on the tax cut of 1964, the personal current tax receipts for 1968, four years after the tax cut is $ _______ billion. 7. Focusing on the tax cut of 1964, the personal current tax receipts for 1969, five years after the tax cut is $ _______ billion. 9. Focusing on the tax cut of 1982, the personal current tax receipts for 1981, the year before the tax cut is $ _______ billion. 10. Focusing on the tax cut of 1982, the personal current tax receipts for 1982, the year of the tax cut is $ _______ billion.
What is meant by the term crowding out? In your answer also explain the implications of crowding out for the macroeconomy
QUESTION 32 The government can use in the form of O a contractionary fiscal policy, a decrease in government spending Ob. an expansionary fiscal policy, an increase in government spending C. an expansionary fiscal policy, an increase in corporate taxes da contractionary fiscal policy, a reduction in taxes to decrease the level of aggregate demand in the economy.
6. Graphical treatment of taxes and fiscal policy The main difference between variable taxes and fixed taxes is that unlike fixed taxes, variable taxes The following graph shows the consumption schedule for an economy with a given level of taxes. Suppose the government implements a tax increase through a fixed tax. Use two green points (triangle symbol) to connect the two black points (plus symbols) representing the consumption schedule after the change in taxes. Hint: The new consumption schedule must pass through one point on the left and one point on the right. REAL CONSUMER SPENDING (Billions of dollars) 8 40 30 8 0 + + + O + ++ 20 40 60 REAL GDP (Billions of dollars) 80 + O + 100 Consumption with Tax Increase through a Fixed Tax Consumption with Tax Increase through a Variable Tax The blue line on the next graph represents the original total expenditure line for this economy before the change in tax structure. Use the new consumption line you just plotted to calculate the new…
Figure 16-7 Price level P3 a P₂ P₁ 0 LRAS A increase taxes LRAS 8 с Y₂ Ya contractionary fiscal policy O increase government spending O decrease interest rates SRAS₁ AD₁ SRAS AD₂ Refer to Figure 16-7. Given that the economy has moved from A to B in the graph above, which of the following would be the appropriate fiscal policy to achieve potential GDP? Real GDP (trillions of dollars)
3. What is fiscal equalization? Give an example
Only typed answer The federal government decides to stimulate the economy and increases government expenditure on new infrastructure projects by $100 billion. The marginal propensity to consume is MPC = 0.3 and the marginal propensity to import is MPI = 0.08. Assuming no crowding out effect, what is the increase in output caused by the stimulus package of$100 billion in a closed economy?