Which of the following scenarios represent expansionary fiscal policies from both a supply perspective and a demand perspective? Choose one or more: BA The Federal Reserve increases the money supply and lowers the interest rate while the government simultaneously reduces future taxes. OB. The government lowers tax rates and issues a partial refund of taxes that have already been paid. OC. The government raises tax rates and reduces payments of unemployment benefits. OD. The government lowers tax rates and undertakes a replacement of old bridges and roads. Suppose that, during a recession, the government borrows money to provide free vwireless Internet access in urban areas. Which of the following statements are correct?
Which of the following scenarios represent expansionary fiscal policies from both a supply perspective and a demand perspective? Choose one or more: BA The Federal Reserve increases the money supply and lowers the interest rate while the government simultaneously reduces future taxes. OB. The government lowers tax rates and issues a partial refund of taxes that have already been paid. OC. The government raises tax rates and reduces payments of unemployment benefits. OD. The government lowers tax rates and undertakes a replacement of old bridges and roads. Suppose that, during a recession, the government borrows money to provide free vwireless Internet access in urban areas. Which of the following statements are correct?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:When the economy is in a recession, the government can use expansionary iscal policy to stimulate and encourage économic growth.
Which of the following scenarios represent expansionary fiscal policies from both a supply perspective and a demand perspective?
Choose one or more:
OA The Federal Reserve increases the money supply and lowers the interest rate while the government
simultaneously reduces future taxes.
OB. The government lowers tax rates and issues a partial refund of taxes that have already been paid.
OC The government raises tax rates and reduces payments of unemployment benefits.
OD The government lowers tax rates and undertakes a replacement.of old bridges and roads.
Suppose that, during a recession, the government borrows money to provide free wireless Internet access in urban areas. Whichof the
following statements are correct?
Choose one or more:
RA This policy will likely be accompanied by an impact lag as the policy takes time to make its way to the people.
O B. The provision of free Internet service is an example of an automatic stabilizer.
OC. Crowding-out will occur as individuals choose to rely on free Internet service instead of purchasing their
own,
O D. The free wireless Internet access in urban areas will likely raise interest rates as the government borrows
more money to finance the purchase.
OE The government is engaging in contractionary fiscal policy.
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