Which of the following is a CORRECT sequence of events during a recession? O Unemployment rises, income rises, tax revenue rises, unemployment benefits rise, and the budget deficit rises. O Unemployment rises, income falls, tax revenue falls, unemployment benefits rise, and the budget deficit rises. O Unemployment falls, income falls, tax revenue falls, unemployment benefits rise, and the budget deficit rises. O Unemployment rises, income falls, tax revenue rises, unemployment benefits fall, and the budget deficit falls.

Which of the following is a CORRECT sequence of events during a recession? O Unemployment rises, income rises, tax revenue rises, unemployment benefits rise, and the budget deficit rises. O Unemployment rises, income falls, tax revenue falls, unemployment benefits rise, and the budget deficit rises. O Unemployment falls, income falls, tax revenue falls, unemployment benefits rise, and the budget deficit rises. O Unemployment rises, income falls, tax revenue rises, unemployment benefits fall, and the budget deficit falls.

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

Which fiscal policy expects the economy to self-adjust? O balanced budget O counter-cyclical O business cycle O cyclically balanced ante changes to this answer
1.6
2
Suppose the equilibrium level of income exceeds the full employment level of income and there is high inflation. Hence, the government decides to implement a fiscal policy that will act to reduce national output and prices. This can be accomplished by: O increasing government spending such that aggregate expenditures are increased. O raising taxes and government spending by the same amount such that aggregate supply is decreased and aggregate demand is increased. O decreasing government spending such that aggregate demand is reduced. lowering average tax rates such that aggregate supply is increased. O increasing transfer payments such that aggregate expenditures decline.
E4
Question 25 Which of the following is true regarding the simple tax multiplier? I has the same sign but larger magnitude than the simple fiscal multiplier. O It has the same sign but lower magnitude than the simple fiscal multiplier. O t has the opposite sign and lower magnitude than the simple fiscal multiplier. It has the opposite sign and a larger magnitude than the simple fiscal multiplier.
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.
3. Explain how expansionary fiscal policy can close a recessionary gap using an appropriate diagram. Note: Use the following terms. They are: Long-run aggregate supply curve (LRAS). short-run aggregate supply curve (SRAS), Aggregate demand (AD). Real GDP price level. potential GDP, etc.
4
please answer b), c), d)
6. Graphical treatment of taxes and fiscal policy The main difference between variable taxes and fixed taxes is that unlike fixed taxes, variable taxes 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. REAL CONSUMER SPENDING (Billions of dollars) 8 40 30 8 0 + + + O + ++ 20 40 60 REAL GDP (Billions of dollars) 80 + O + 100 Consumption with Tax Increase through a Fixed Tax Consumption with Tax Increase through a Variable Tax 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 consumption line you just plotted to calculate the new…
Figure 16-7 Price level P3 a P₂ P₁ 0 LRAS A increase taxes LRAS 8 с Y₂ Ya contractionary fiscal policy O increase government spending O decrease interest rates SRAS₁ AD₁ SRAS AD₂ Refer to Figure 16-7. Given that the economy has moved from A to B in the graph above, which of the following would be the appropriate fiscal policy to achieve potential GDP? Real GDP (trillions of dollars)