Suppose an economy is above full employment. A policy to slow the economy's growth rate might A. raise taxes, decrease government expenditures, or decrease the quantity of money O B. raise taxes and government expenditures, or decrease the quantity of money C. cut taxes, decrease government expenditures, or decrease the quantity of money D. raise taxes, decrease government expenditures, or increase the quantity of money O E. cut taxes, increase government expenditures, or increase the quantity of money This policy would create deflation if A. the quantity of money was decreased by more than taxes increased B. the tax increase and expenditure decrease brought a government surplus O C. government expenditure decreases by more than the increase in taxes D. the tax increase and expenditure decrease increased the government surplus O E. the change in demand was so much greater that it moved real GDP below potential GDP

Suppose an economy is above full employment. A policy to slow the economy's growth rate might A. raise taxes, decrease government expenditures, or decrease the quantity of money O B. raise taxes and government expenditures, or decrease the quantity of money C. cut taxes, decrease government expenditures, or decrease the quantity of money D. raise taxes, decrease government expenditures, or increase the quantity of money O E. cut taxes, increase government expenditures, or increase the quantity of money This policy would create deflation if A. the quantity of money was decreased by more than taxes increased B. the tax increase and expenditure decrease brought a government surplus O C. government expenditure decreases by more than the increase in taxes D. the tax increase and expenditure decrease increased the government surplus O E. the change in demand was so much greater that it moved real GDP below potential GDP

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

13
Which of the following is carried out in an expansionary fiscal policy? O a. Higher taxes and lower government expenditure O b. Lower taxes and higher government expenditure O c. Higher taxes and higher government expenditure O d. Lower taxes and lower government expenditure.
Answer exercises 11-14 on the basis of the following information. Assume that equilibrium real GDP is $800 billion, potential real GDP is $950 billion, the MPC is .80, and the MPI is .40.
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?
22.
24.
5.
The national debt is a Select one: O A flow; flow O B. stock; stock O C. stock; flow OD. flow; stock variable. The federal government's budget deficit is a variable.
28. Which of the following policies might provide a remedy when the equilibrium output in an economy is above the potential level of output? a. Increase government spending. b. Decrease the federal funds rate. c. Increase transfer payments. d. Raise taxes. e. Buy more government securities.
What would happen to output, employment, and the price level if the government increased spending on infrastructure, ceteris paribus? O Output would decrease, employment would decrease, and the price level would decrease O Output would decrease, employment would decrease, and the price level would increase O Output would decrease, employment would increase, and the price level would increase Output would increase, employment would increase, and the price level would decrease. O Output would increase, employment would increase, and the price level would increase Question 2(Multiple Choice Worth 5 points) (03.06 MC) Assume the price level is increasing, real GDP is decreasing, and the unemployment rate is increasing. Which event would explain this macroeconomic situation? OA positive supply shock OA negative supply shock A positive demand shock OA negative demand shock O insufficient data
The demand function of a good A,B and C could be shown as Qa.Pa Pb P.2-1 = 0 Qb.P. PuP.2-0,5 = 0 Qc.Pa?P?Pc-2 = 0 Pis price and Q is the quantity in unit a. Please define whether this good is elastic, elastic unitary or inelastic? b. What is the relation between good A and B, A and C, B and C, is it substitutive or complementary?
All of the following, except one, would result from expansionary fiscal policy. Which is the exception? Multiple Choice O O O Increased price level. Increased GDP. Decreased budget deficit. Decreased unemployment. 4