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- If the supply of petroleum were reduced by petroleum firms due to rising inventories, we can expect what?Which of the following policy measures is not discretionary? a. Income tax surcharges designed to reduce budget deficits b. Investment tax credits designed to stimulate new investment c. Interest payments for servicing the national debt d. Income tax deductions for your tuition e. Public works programs designed to speed up highway constructionDo you think taxpayers would be willing to pay higher property taxes if the revenue is earmarked for a specific purpose?
- The economy of Bananaland can be characterized by Equation 9.3. EQUATION 9.3: C = 2,000 + 0.75Yd T = 200 G = 400 I = 500 Calculate the government spending multiplier.The three common limitations of discretionary fiscal policy are information lag, decision lag, and execution lag. True False A Moving to another question will save this response.When the Federal government takes action to change taxes and spending to stimulate the economy such policy is: A) Discretionary B) Passive C) Automatic D) Nondiscretionary
- For the U.S. government, which of the given is NOT an example of discretionary spending? defense spending science spending Medicaid Medicare For the U.S. government, which of the given is NOT an example of mandatory spending? Medicare education spending Social Security interest on the national debt Which type of spending currently takes up a larger proportion of the U.S. federal budget? Mandatory spending and discretionary spending take up an equal amount. mandatory spending discretionary spendingRefer to the News Wire to answer three questions. NEWS WIRE: FISCAL STIMULUS: TAX CUTS Trump Tax Cuts Boost Spending The Tax Cuts and Jobs Act of 2017 seems to be working. Although the lion's share of President Trump's tax cuts went to business, consumers got a tax break as well. For the average U.S. household, the tax cut amounts to roughly $40 a week in take-home pay. That may not sound like much, but with 130 million households, that extra income can pack some punch. According to the National Retail Federation, consumer spending was up 4.8 percent in the first six months of this year. And the government reports that GDP grew by 4.2 percent in the second quarter, the best performance since 2014. There may be other factors at work here, but tax-cut fueled consumer spending is certainly a big contributor. Source: News accounts of September–October 2018. Instructions: In part a, enter your response as a whole number. In parts b and c, round your responses to one decimal…Equilibrium output only occurs when 1) government budget is balanced 2) there are no output gaps 3) there is no tendency for output to change 4) the level of imports is equal to the level of exports
- Refer to the Laffer curve below. Which of the following is true? A) At A there will be a budget surplus, but at B there will be a budget deficit. B) At A tax rates are higher than at B, but tax revenue collected are the same. C) At B tax rates are higher than at A, but the tax revenues collected are the same. Tax Revenue 0 Tax Rate (Percent) B 100The impact of an increase in government spending would be to a) increase the interest rate b) leave the interest rate unchanged c) decrease the interest rateSuppose the following list of events describes all of the economic activity resulting from an increase in government spending. Suppose that at each step after the initial one, the marginal propensity to consume is 0.62 and the tax rate is 8%. Step 0. The government spends $8500 on meat to host a very large dinner for foreign diplomats. Step A. The butcher takes the income earned by selling the meat, saves some, and spends the rest on a wedding cake for his daughter. Step B. The baker who produced the wedding cake saves some of her earnings and uses the rest to purchase beautiful candlesticks as gifts for all of her friends. Step C. The local candlestick maker saves some of his revenue for retirement and spends the rest on building materials to improve his house. Instructions: Modify the settings in the interactive tool to represent this event. Then click "Spending Rounds" and use the table to answer the following questions. Round answers to the nearest cent, if necessary. How much does…