Macroeconomics
13th Edition
ISBN: 9781337617390
Author: Roger A. Arnold
Publisher: Cengage Learning
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Question
Chapter 18, Problem 3QP
To determine
Acceptability of the statement.
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Students have asked these similar questions
Which of the following is considered contractionary fiscal policy?
A) Congress decreases the income tax rate.
B) Congress decreases defense spending.
C) Legislation removes a college tuition deduction from federal income taxes.
D) The New Jersey legislature cuts highway spending to balance its budget.
Why Krugman believe that fiscal austerity in france or more generally in Europe would fail?
Compare two fiscal policies: a tax cut on income or an increase in government spending on roads and bridges. What are both the short-term and long-term impacts of such policies on the economy?
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- Based on the Krugman text and your reader articles, what position do you take on the current fiscal policy debate of stimulus vs austerity? Be sure to include the current tight job markets, moderate-high inflation, and high-debt conditions in justifying your answer.arrow_forwardPlease answer everything in the photo. The bottom question is asking if it is taxes or government purchases.arrow_forwardWhich of the following is NOT a fiscal policy action? Group of answer choices decreasing government spending on the arts lowering income tax rates. raising the quantity of money in circulation increasing government expenditures on military hardwarearrow_forward
- Compare and contrast the use of government spending changes versus tax changes as a means of influencing the course of the economy. Is one or the other preferable in specific situations? What would be the limitations of fiscal policy? short answer ( paragraph)arrow_forwardIn preparing their estimates of the stimulus package's effect on GDP, Obama administration economists estimated a government purchases multiplier of 1.57. Economist Robert Barro argues that the government purchases multiplier would be lower than the administration's estimate, and economists Lawrence Christiano, Martin Eichenbaum, and Sergio Rebelo argued that the multiplier would be higher than the administration's estimate. when the unemployment rate is high; when the value of the dollar is depreciating against foreign currencies when the federal budget is in surplus; when government transfer payments are declining during wartime; when short-term interest rates are near zero during a recession; when the inflation rate is relatively lowarrow_forwardIf an increase in government spending is accompanied by a reduction in spending by firms and households, economists call this: a) Fiscal policy b) Crowding out c) The accelerator d) Hysteresisarrow_forward
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