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Part A: Short Questions (Use graphs where applicable)
I. What are the automatic stabilizers in the fiscal policy? How does fiscal policy destabilize the economy, explain with graph?
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- 1. The Multiplier and Fiscal Policy: one of the programs to combat the economic effects of the recession and pandemic was the CARES Act passed in March 2020. One of the provisions of the CARES act was a relief check of $1200 per adult and $500 per dependent child. These payments were actually advance rebates on 2020 taxes and so the payments came from the IRS. This tax cut distributed about $300 billion to most, but not all of the U.S. population. Major exceptions included families with undocumented members (which invalidated the whole family, even those who were legal residents or U.S. citizens), dependent adults (which invalidated many college students as well as seniors living with their children). The program was phased out for individuals making more than $75,000 and married couples earning more than $150,000. Which of the following statements is correct about the multiplier effect of this part of the CARES act? Group of answer choices The multiplier effect would be greater than…Assume that the economy experiences very high increasing energy prices. 1. Explain about what counter cyclical fiscal policy should be used. (Use the macroeconomic approach and include diagram)Economics: Public Economics Question: 1 Over long periods of time, the present discounted value of tax revenue must be greater than or equal to the present discounted value of government expenditures. This statement illustrates the concept of a. income equality b. capital markets c. intergenerational equity d. intertemporal budget constraints Question: 2 Why do some budget modelers criticize the use of static scoring?a. The impact of government policy on the economy is not perfectly understood. b. It is unreasonable to assume that government policy does not affect the size of the economy. c. most policy does not result in individuals changing behavior.d. government policy only changes distribution of resources, not their availability. Question: 3 If the economy is in recession, the government budget deficit is ___ the cyclically- adjusted deficit. a. the same asb. unrelated toc. smaller than (in absolute value) d. greater than (in absolute value) Question: 4 According to…
- Question 15 Congress' Economic Council recommends avoiding budget deficits to avoid crowding out private investment. The council appears to follow a. the supply side approach to fiscal policy. b. the neoclassical approach to fiscal policy. c. the Keynesian approach to fiscal policy. d. conservative principles to avoid debt.Question: Solve for the equilibrium level of output in the following two scenarios: there isan income tax t=0.1, The income tax would result in the total amount of tax to be the lump sum tax and the income tax rate on income when t=0.1t=0.1 Y=−5+0.5(Y−250−0.1Y)+200+300+50' =−5+0.5(0.9Y−250)+550 =−5+0.45Y−125+550 =0.45Y−420 0.55Y=420Y=4200.55=763.636≅763.64 Please explain this solution. Where does the 0.45Y come from?Please answer all question, it's really matter. ( not very long, just short understandable answers) 1. Does the US currently rely more on fiscal policy or monetary policy to stabilize the economy? 2. Does fiscal policy have an expansionary bias? explain 3. Does fiscal policy have an expansionary bias?
- Part A Decide whether each of the following fiscal policies of the federal government is expansionary or contractionary. Write expansionary or contractionary, and explain the reasons for your choice. 1. The government cuts business and personal income taxes and increases its own spending. Expansionary. The decrease in personal income taxes increases disposable income and thus increases consumption spending. The business tax cut increases investment spending, and the increase in government spending increases government demand. 2. The government increases the personal income tax , Social Security tax and corporate income tax Government spending stays the same 3. Government spending goes up while taxes remain the same. 4. The government reduces the wages of its employees while raising taxes on consumers and businesses Other government spending remains the sameTopic: Fiscal Policy 1. A government collects $0.35 on every new dollar of income. Of the remaining $0.65 of disposable income, 20% is spent on imports, and 10% of the disposable income is saved. a. What is the marginal propensity to withdraw?b. How much of each new dollar of income is spent on domestic consumption?c. What is the spending multiplier in this economy?Ch 17- Budget balances The graph, questions seen in photo, and the question in italics are what I need help with, thanks! In 1967, the national debt (increased or decreased) by ( how many billion dollars).
- 1. What is fiscal policy? 2. What are the shortcomings of fiscal policy? 3. What is supply-side fiscal policy? Notes Comments :: étv MacBook Ai F9 F10 F5 F6 F7 F8Question 5 Which of the following BEST shows fiscal policy? The Federal Reserve buys bonds. The United States increases trade with China. Oc The Central Bank decides to print more money. Congress passes a decrease in taxes. ©2021 Illuminate Educatin6. Graphical treatment of taxes and fiscal policy The main difference between variable taxes and fixed taxes is that unlike fixed taxes, variable taxes do not vary with GDP The following graph shows the consumption schedule for an economy with a given level of taxes. Suppose the government implements a tax increase through a fixed tax. Use two green points (triangle symbol) to connect the two black points (plus symbols) representing the consumption schedule after the change in taxes. Hint: The new consumption schedule must pass through one point on the left and one point on the right. Hint: The new consumption schedule must pass through one point on the left and one point on the right. 50 Consumption with Tax Increase through a Fixed Tax Consumption with Tax Increase through a Variable Tax + 20 40 60 80 100 REAL GDP (Billions of dollars) The blue line on the next graph represents the original total expenditure line for this economy before the change in tax structure. Use the new…
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