The government of the United States is worried that the inflation rate is too high. What fiscal policy would the US government adopt to reduce the inflation rate?Alower the jncome tax rateBlower the federal interest rateinvest in public works projectsdecrease government spending©2021Illuminate EducationTM, Inc.

Option D To reduce the inflation rate, the government has to undertake steps to reduce the level of…

The government of the United States is worried that the inflation rate is too high. What fiscal policy would the US government adopt to reduce the inflation rate? O A lower the income tax rate B lower the federal interest rate invest in public works projects D decrease government spending

The government of the United States is worried that the inflation rate is too high. What fiscal policy would the US government adopt to reduce the inflation rate? O A lower the income tax rate B lower the federal interest rate invest in public works projects D decrease government spending

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: For this economy to produce Y1 and sustain it without inflation a) the price of oil must increase.…

A: The long run market equilibrium level is one where the aggregate demand (AD), short run aggregate…

Q: The AD curve can be shifted by Select one: O a. both fiscal and monetary policy. O b. fiscal policy…

A: The AD curve or aggregate demand curve shows the effect of price level on the output, AD curve is…

Q: According to Martin Gilens, which of the following best explains why most Americans are in favor of…

A: Welfare refers to a government software or social support system designed to provide assistance and…

Q: Which of the following statement about the output gap is correct? The output gap is Select one: a.…

A: Output gap is the gap between the two type of output.

Q: A decrease in the income tax rate O a. increases the tax wedge. O b. decreases potential GDP. Oc.…

A: Income tax is a govt-imposed tax on the individual's income. This is a method to secure govt revenue…

Q: 1.. what is globalization? how do you think it might have affected the economy over the past decade?

A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: When the government cuts the income tax rate, the real wage rate received by workers potential GDP…

A: A tax is a mandatory payment to the government. The tax amount is used by the government for public…

Q: Which of the following shocks has the biggest potential to increase a country's potential GDP? O A…

A: Gross domestic product (GDP) is the standard measure of the value added created through the…

Q: QUESTION 4 If income tax rates are based on nomir OA their taxes fall as their income f. OB. an…

A: If income tax rates are based on nominal income , as inflation increases , taxpayers will see an…

Q: If labor supply decreases, what will happen to the real wage rate, employment, and real output,…

A: Labour supply refers to the amount of time and effort that individuals are willing and able to…

Q: "If the government aims to reduce the price in order to reduce inflation rate, government should"…

A: Fiscal policy refers to a government's approach to influencing the state of the economy through…

Q: Distinguish between demand-pull inflation and cost-push inflation. Which of the two types is most…

A: Inflation refers to an abnormal hike in the price level of goods and services in the economy, so if…

Q: If you sold the stock after 10 years and your tax rate was 20.0%, how much tax would you owe? $…

A: When you sell stocks for a profit, you have to pay capital gains taxes. Capital Gain Tax imposed by…

Q: According to the Keynesian framework, ____________ in _______________ may cause inflation, but not a…

A: Inflation usually means rise in prices and and recession is such a period where less demand are seen…

Q: 30. Increasing the debt ceiling is tied to the increase in the CPI. а. b. must be approved by…

A: The debt ceiling refers to the amount of debt that the nation should have in its budget. An increase…

Q: QUESTION 20 Which of the following is correct? O A. The Bureau of Labor Statistics produces data on…

A: INTRODUCTION: The Bureau of Labor Statistics (BLS) is a federal agency that does collect and…

Q: In the long run, the government budget will add to sustained inflation if. Oa Deficits are always…

A: Answer: b In the long run, the government will add to sustained inflation if continual deficits are…

Q: Fluctuations in the economy caused by policymaker's manipulation of the economy for the purpose of…

A: Fluctuations in the economy can be explained by the changes in the income of the people and the…

Q: * Question 10 The government is concerned that the high inflation rate is threatening the…

A: Government can undertake the below fiscal measures to reduce the inflation rate 1. Increase taxes -…

Q: Please answer fast please arjent help please fast please

A: Unemployment is the rate of unemployment that exists in an economy within the given time period or…

Q: 10, Explain why extending unemployment insurance benefits has both a supply-side and demand side…

A: A government program that provides support to unemployed individuals in the form of income…

Q: INFLATION RATE LRAS AD SRAS REAL GOP GROWTH RATE Suppose a change in fiscal policy causes the AD…

A: This can be defined as a concept that shows the total demand for the products and services in a…

Q: Real Income (Y) Real GDP Potential GDP T1 T2 T3 T4 T5 Years (a) Based on the given business cycle…

A: Economic recession refers to a fall in the economic activity in an economy. This lower economic…

Q: Explain whether the following stati:,,.nents arc true,false, or uncertain.a. "lnflation hurts…

A: Inflation refers to the increase in the price level from one period to another. Inflation is…

Q: Fiscal Policy - Ask FRED The accompanying graph depicts the unemployment insurance benefits paid by…

A: The graph reveals that the spending of average unemployment insurance in 2007 is nearly $30 billion.

Q: Because money growth is a major component determining the inflation rate, in order to forecast…

A: Disclaimer : “Since you have posted a question with multiple sub-parts, we will solve first three…

Q: Please draw a change that raises the final incomes of the poorest households, but doesn't raise…

A: To raise the final income of the poorest without changing the spending, the new policy line must cut…

Q: Aggregate demand measures: the average price of all goods and services demanded. O the total output…

A: Aggregate demand:- AD=C+I+G+NX where; AD= Aggregate demand C=…

Q: Draw a graph that shows inflation and that the output is increasing and label PL's, GDP's, AD and…

A: Aggregate Demand (AD) and Aggregate Supply(AS) Framework: The AD/AS model is one of the fundamental…

Q: What impact does full employment have on the economy?

A: We can say that When all the labor resources in an economy are utilized in an optimum manner or in…

Q: The us government has shutdown a number of times in recent history. Explain how a government…

A: The government shutdown will have a negative impact on investment and saving identity as:…

Q: Question 8 The American Recovery and Reinvestment Act was criticized by some economists from…

A: An economist who adheres to John Maynard Keynes' economic views (a British economist who lived from…

Q: The two main types of inflation are demand-pull and labor-slide O True O False

A: Since you have asked multiple questions, we are answering the first question for you. If you want…

Q: Suppose the tax rate on interest income is 50 percent, the real interest rate is 3 percent, and the…

A: Cost-push inflation (also known as wage-push inflation) occurs when overall prices increase…

Q: Classical economists believed in raising the budget deficit to cure inflation. O True O False

A: The statement is false

Q: Briefly discuss the two points below: a) When we look at the economy of an entire country…

A: Government and entrepreneurship are commonly blamed for the disparities in growth rates. The two…

Q: 1. Explain how the effectiveness of fiscal and monetary policy depends on whether the policy change…

A: Monetary Policy:Monetary policy refers to the actions and decisions made by a country's central bank…

Q: A fiscal policy proposes cuts in tax rates on businesses in order to to stimulate investment and…

A: Fiscal policy refers to the one that is implemented by the government with the aim of stabilizing…

Q: Using the data, provide estimates of the following key National Accounting Aggregates a. Gross…

A: In National Income Accounting from Expenditure Method - National Income : GDP = C + I + ( G - T ) +…

Q: Suppose most economists agree that the target rate of unemployment is between 5 and 8 percent. If…

A: The target rate of unemployment means the lowest possible level of unemployment desired in the…

Q: Doing a contractionary phase of the business cycle which of the following most likely of occurs?

A: Business cycles represents the recurrent ups and down in the level of GDP produced by an economy…

Q: 17. Which of the following is used as a remedial measure during inflation in an economy? a.…

A: Meaning of Inflation: The term inflation refers to the situation under which there is an excessive…

Question

The government of the United States is worried that the inflation rate is too high. What fiscal policy would the US government adopt to reduce the inflation rate?
A
lower the jncome tax rate
B
lower the federal interest rate
invest in public works projects
decrease government spending
©2021Illuminate EducationTM, Inc.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

21. Which of the following events may lead to deflation? A. decrease in government spending during a rapid expansion B. decrease in government spending during a severe contraction C. increase in government spending during a very deep trough D. increase in the rate of government hiring at the peak of a cycle
Ap Econ
If the government enacts an expansionary policy during a time of full employment, ______. A. price levels and GDP will decrease B. price levels and GDP will increase C. price levels will increase, but GDP will not be affected long-term D. price levels will decrease, but GDP will not be affected long-term Only typed answer and don't use chat gpt to solve the problem
1 How much more (or less) output will the average American have next year if the $22 trillion U.S. economy (GDP) grows (or contracts) by Book Ask References Instructions: Round your responses to the nearest dollar. If the economy is contracting be sure to include a negative sign (-) in front of your answer. assuming a population of 340 million. a. 1 percent? $1 y Eper person b. 3.5 percent? $ c. 1.5 percent? $ per person per person Check my
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?
Question 3/28 > NEXT BOOKMARK Workers pay tax for Social Security and Medicare every time they get paid. A an income Ba sales Ca property a payroll DELL
11 which of the following is a macroeconomic * decision or concent the unemployment rate for the entire economy the price of oil O the unemployment rate for a firm O how many television sets to produce O
17. The equilibrium level of income determined by the equality of Aggregate Demand and Aggregate Supply indicate the full employment level. a. False b. True
Using a correctly labelled aggregate demand and aggregate supply diagram, show how the increase in investment will affect each ofthe following in the short run.i. Output ii. The price level c. Identify one fiscal policy action that could counter the increase in investment. Explain how this policy will affect each of the following.i. Output ii. The price level iii. Nominal interest rates d. i. Identify one monetary policy action that could counter the increase in investmentsii. Using a correctly labelled money market graph, show how this policywill affect nominal interest rates
2
Stagflation occurs when the economy's are both high. Lütfen birini seçin: O A. unemployment rate and deflation rate O B. inflation rate and growth rate O C inflation rate and interest rate OD unemployment rate and growth rate OE inflation rate and unemployment rate
The graph below depicts an economy where an increase in aggregate demand has caused Inflation. Assume the government decides to conduct fiscal policy by changing taxes to bring Inflation under control. Price Level 160 150 140 130 120 110 100 90 80 70 60 50 Fiscal Policy LRAS AS Real GDP (billions of dollars) AD₁ AD 40 80 160 240 320 400 480 560 640 720 800 Instructions: Round your answers to 2 decimal places. If you are entering a negative number include a minus sign. a. How much does aggregate demand need to change to restore the economy to its long-run equilibrium? billion b. If the MPC is 0.75, how much do taxes need to change to shift aggregate demand by the amount you found in part a? $ billion Suppose Instead that the MPC is 0.5. c. How much does aggregate demand and taxes need to change to restore the economy to its long-run equilibrium? Aggregate demand needs to change by $ billion and taxes need to change by $ billion.