Sub-part
A
The lags in the discretionary policy from the time when the government determines that recession is there in economy until a tax cut is there in order to reduce
Sub-Part
B
The lags in the discretionary policy from the time there is an increase in the money supply to until its effects on the economy is realized and the reasons for which the long lags make discretionary policy ineffective.
Sub-Part
C
The lags in the discretionary policy from the time the recession has started until the time until the time government has identified the severity and existence of recession and the reasons for which the long lags make discretionary policy ineffective.
Sub-Part
D
The lags in the discretionary policy from the time there is an increase in the money supply to until its effects on the economy is realized and the reasons for which the long lags make discretionary policy ineffective.
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Chapter 16 Solutions
MACRO ECON 6
- Please answer the following attached question: there are 3 correct answers:arrow_forwardThe Australian Government in the 2015-16 financial year is set to spend $31.9 billion dollars on national defence. There is talk that some of this money will go towards building submarines in South Australia, generating thousands of jobs for South Australia. Kevin is complaining to Henry that this is an inefficient use of money as no individual Australian values national defence at that level and that the spending is just to ensure government politicians get re-elected. There can be multiple answers for this, not just the one.arrow_forwardThe U.S. population has a bubble of individuals known as the baby boomers. As this group retires, what happens to savings? A.Savings decreases as they retire but this is completely offset by increases with the next generation of workers. B.Savings declines as baby boomers dissave. C.Savings increases because baby boomers retire and therefore spend less. D.Nobody can predict what old people do; they don’t seem to be rational.arrow_forward
- Which of the following is a deflationary measure? Select one: a. Discouraging savings b. Decreased Interest rate c. Encouraging borrowing d. Increased Government spending e. Increased taxesarrow_forward2. Juan has been doing some research on countries in Europe and Africa. Juan has observed that European countries are wealthier and that they have a higher percentage of workers who are college educated. Therefore, Juan concludes that sending more Africans to college will increase ecenomic growth and wealth in Africa. Discuss the validity of this conclusion. 3. Imagine you are either a Classical economist or a Keynesian economist. Argue against the other side. List their primary beliefs and offer rebuttals from the other perspective. 4. The slope of the AE curve is 80, What is the expenditure multiplier? Everything else the same, by how mach does equilibrium aggregate expenditure inerease if the follwoing occurs: 1. Exports increase from $1.75 trillion to $2.25 trillion., 2. Government expenditures on goods and services deerease from $2.0 trillion to $1.8 trillion, 3. Investment increase from S1.2 trillion to $23 trillion.arrow_forwardWhich economic policies affect a government's budget and include the increase or decrease the money supply?arrow_forward
- You read the following headline in the newspaper: "Following an expansion of military efforts, the consumer price index increased by 5% in the past year." Please assess if (a) this is fiscal or monetary policy (b) the policy is contractionary or expansionary (c) GDP will increase or decrease (d) Unemployment will increase or decrease This is Write your response here... (fiscal/monetary) policy. This policy is Write your response here... (expansionary/contractionary). It will lead to a(n) Write your response here... (increase/decrease) of GDP while unemployment will tend to Write your response here... (increase/decrease).arrow_forwardWhich of the following is accurate? Select one: a. Monetary policy is neutral in both the short run and the long run. b. Monetary policy has profound effects on real variables in the long run, but is neutral in the short run. c. Monetary policy has profound effects on real variables in both the short run and the long run. d. Though monetary policy is neutral in the long run, it may have effects real variables in the short run.arrow_forwardWhich of the following is an example of an automaticstabilizer? When the economy goes into a recession,a. more people become eligible for unemploymentinsurance benefits.b. stock prices decline, particularly for firms incyclical industries.c. Congress begins hearings about a possiblestimulus package.d. the Fed changes its target for the federal funds rate.arrow_forward
- The time it takes for a policy to influence the economy once it has been enacted is called the: A. effectiveness lag. B. legislative lag. C. recognition lag. D. implementation lag. E. data lag.arrow_forwardYou read the following headline in the newspaper: "Lower tax rates have led to an increase in housing starts." Please assess if (a) this is fiscal or monetary policy (b) the policy is contractionary or expansionary (c) GDP will increase or decrease (d) Unemployment will increase or decrease This is blank1 - Word Answer Write your response here... (fiscal/monetary) policy. This policy is blank2 - Word Answer Write your response here... (expansionary/contractionary). It will lead to a(n) blank3 - Word Answer Write your response here... (increase/decrease) of GDP while unemployment will tend to blank4 - Word Answer Write your response here... (increase/decrease).arrow_forwardUse of discretionary policy to stabilize the economyarrow_forward
- Exploring EconomicsEconomicsISBN:9781544336329Author:Robert L. SextonPublisher:SAGE Publications, Inc