Refer to the figure above. A Keynesian fiscal policy to eliminate a recessionary gap can be portrayed as a move between points: O D to A. B to A. D to C. B to C.
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- Refer to the diagram that shows an AD/AS model for a hypothetical economy. Suppose the economy is in a short-run equilibrium at Y₁. An appropriate fiscal policy for attaining potential output (Y*) is a(n) O A. decrease in current imports. O B. increase in personal and corporate taxes. O C. decrease in current consumption. O D. increase in exports. Po B Y₁ Real GDP AD GCourse: Macroeconomic - IS-LM Model Prove mathematically the following: Given an increase in the proportional tax on income(t), what happens to the level of output and to the tax?" . Hint: for demostration, use the IS general function for a closed economy Y = C + I + G, where C = a + c*YD and YD = Y + TR - Y*t (where t = proportional income tax) and realize changes i.e., from "t1" to "t2"Q7
- hello, so ive already asked this question but i dont understant the answer that i was given. This is what I have so far: true or false: "tax cuts directed at higher income individuals will do more to stimulate the economy than those directed to lower income individuals, in the keynesian model." my reasoning with this is that its true? can you explain this to me? wouldnt the economy be stimulated more if it was given to a lower income individual because they are most likely to spend it? ANSWER I WAS GIVEN: Step 1 According to Keynes, the economy will be an unstoppable machine operating at maximum capacity if people did not save something. To allow people to spend more, Keynesians suggested tax savings. The Keynesian model, established by British economist John Maynard Keynes portraying savings as a drain on the economy and thus making deficit spending appear superior. However, unless someone keeps all of his or her savings in cash, which is unusual, savings are invested, either by…The classical model focuses on O increasing goverment spending both the shifting of the aggregate demand curve and aggregate supply curve. O a shifting of the aggregate demand curve. O a shifting of the aggregate supply curve. Question 9 For the classical model to work, it is important that O people be willing to cooperate and compromise. O there be top/down centralized management of the economy. O the government is willing to help increase aggregate demand. O the value of debt is increased through inflation.SRAS PL2 PL AD2 AD REAL GDP The Aggregate Demand Model shows an increase in Aggregate Demand or an increase in GDP. Which Fiscal Policy Action would cause this change O Raise Taxes & Cut Government Spending O Decrease Taxes & Government Spending O Increase Taxes & Government Spending O Cut Taxes and Increase Government Spending PRICE LEVEL
- please state which one the answer is Many thanks - question is attachedHello, I would like help on this assignment Thank you, Keynes & Friedman Explain how Keynes theorized the government could improve macroeconomic outcomes, especially in a recession. Use a diagram in your explanation. Include the pros and cons of this theory. Explain how Friedman theorized macroeconomic outcomes could be improved. Use a diagram in your explanation. Include the pros and cons of this theory. Contrast Keynes and Friedman theories on how to improve economic outcomes. Recently in the WSJ, there was an article about the issues of high levels of debt explain how this relates to both Keynes and Friedman.Look at Figure 3. Assume this aggregate demand diagram represents an economy with government, where: a = exogenous consumption b = the marginal propensity to consume t = the tax rate |= investment G = government spending Y = income Figure 3 Aggregate AD, demand AD, 45° Income Select the option that describes a possible scenario shown by the shift from AD, to AD, in Figure 3. Select one: O Rise in tax rate and rise in government spending. O Rise in tax rate and fall in government spending. O Fall in tax rate and fall in government spending. O Fall in tax rate and rise in government spending. ( Previous page Next page > PHILIPS
- Suppose that the government reduces the lump-sum tax, and suppose that gov- ernment always has a balanced budget: G = T. Using a diagram, describe and explain the effects of this policy on aggregate output, consumption, employment (or hours worked), and the real wage (note: show the effects on a graph with the production possibilities frontier and indifference curves).a. Using the AD-AS model, the simple income multiplier will overestimate the effect of an increase in government spending.' TRUE or FALSE. Explain your answer. b) 'An increase in the tax rate will make the AE curve steeper and the AD curve flatter. TRUE or FALSE. Explain your answer.If aggregate demand