Q.1.1An increase in the budget deficit is the result of:(a) Expansionary monetary policy;(b) Contractionary monetary policy;(c)Expansionary fiscal policy;(d)Contractionary fiscal policy.Q.1.2Company tax is a:(a) Progressive, direct tax;(b) Progressive, indirect tax;(c) Proportional direct tax;(d) Regressive indirect tax.Q.1.3In the base year, a country produced 50 units of output at a price of R6,00 eachfor a nominal GDP of R300. This year it produces 60 units of output at a price ofR8,00 each. What is the percentage change in real GDP since the base year?(a) 5%;(b) 10%;(c) 20%;(d) 15%.Q.1.4Which of the following statements about Fiscal Policy is INCORRECT?(a) In order to combat inflation, the South African Reserve Bank must apply acontractionary fiscal policy;(b) A contractionary fiscal policy can result in higher levels of unemployment;(c) Expansionary fiscal policy will increase the budget deficit;(d) The application of fiscal policy will have no effect on aggregate supply in theAD-AS model. Q.1.6Given the import function, Z = 300 + 2/3Y, which of the following statements iscorrect?(a) The marginal propensity to save is 1/3;(b) The induced component is 300;(c) 2/3 is the proportion of any income spent on imports;(d) None of the statements is correct.Q.1.7An increase of R5 billion in income in a macroeconomy leads to an increase in R3billion in consumption spending. From this information, we can determine that themarginal propensity to save in this economy is:(a) 0.6;(b) 0.5;(c) 0.3;(d) 0.4.Q.1.8Mr Brown has recently been retrenched. The firm he worked for had to retrencha number of staff due to the downturn in the economy. Mr Brown has notmanaged to find alternative employment. We can say he isunemployed.(a) Structurally;(b) Cyclically;(c) Seasonally;(d) Frictionally.Q.1.9If the CPI was 106 in 2013 and 116 in 2014, the inflation rate in 2014 was:(a) 106%;

Expansionary fiscal policy- The expansionary fiscal policy is the increase in government…

Answered: Q.1.1 An increase in the budget deficit…

Q.1.1 An increase in the budget deficit is the result of: (a) Expansionary monetary policy; (b) Contractionary monetary policyB (c) Expansionary fiscal policy; (d) Contractionary fiscal policy.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter30: Government Budgets And Fiscal Policy

Section: Chapter Questions

Problem 53P: Specify whether expansionary or contractionary fiscal policy would seem to be most appropriate in...

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Specify whether expansionary or contractionary fiscal policy would seem to be most appropriate in response to each of the situations below and sketch a diagram using aggregate demand and aggregate supply curves to illustrate your answer: A recession. A stock market collapse that hurts consumer and business confidence. Extremely rapid growth of exports. Rising inflation. A rise in the natural rate of unemployment. A rise in oil prices.
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component of the budget. 3ldentify the impact that each of the following changes in fiscal policy would have on the level of economic growth. a) A reduction in the budget deficit from $200 billion last year to $150 billion this year b) An unchanged budget surplus of $12 billion last year and this year c) A shift from a $15 billion deficit last year to a balanced budget this year. PrtScn F8 Home F9 F7 F6 F5 近

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