Economics (MindTap Course List)
13th Edition
ISBN: 9781337617383
Author: Roger A. Arnold
Publisher: Cengage Learning
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Chapter 18.10, Problem 3ST
To determine
Acceptability of the statement.
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Which of the following is NOT a category of fiscal policy?
Government policies regarding the purchase of goods and
services
Government policies regarding taxation
Government policies regarding transfer payments and
welfare benefits
Government policies regarding money supply in the economy
This course is designed to provide an understanding of market economies and the fluctuations they are subject to. With this in mind, please answer the questions that follow.
a) Assume the economy is in a recession. Discuss how the government could implement fiscal policy to deal with the recession and the steps by which fiscal policy moves the economy out of the recession (Explain fully).
b) Explain how expansionary fiscal policy in the U.S. would affect the economies of other countries.
Describe some fiscal policies that governments are presently using to counter the impact of coronavirus on an economy. Discuss if these policies are more, or less likely, to deliver long-term social equity. Could these policies be used to create more social security/welfare; discuss and compare any negative consequences that these policies could have on an economy and critique the various ways the government could minimise or remove such negative consequences?
Chapter 18 Solutions
Economics (MindTap Course List)
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- Which of the following best describes a fiscal policy tool? 1. Government spending II. Government taxes III. Interest rates. IV. Bank lending V. Financial capital markets I and II I and VI III, IV, and Varrow_forwardWhich of the following sentences correctly describes the budget of the Federal Government of the Unites States during the past six decades? A. Since 1961, the Government always runs in budget deficits, meaning it spends more money than it receives every year – except for the brief period of 1998 to 2001. B. Since 1961, the U.S. Government has been an example of how to run a country on a balanced budget, meaning it balances the level of spending with the level of tax revenue. C. Since 1961, the Government always runs in budget surpluses, meaning it receives more money than it spends every year – except for the brief period of 1998 to 2001. D. Since 1961, the Government budget doesn’t show a clear trend. About half of the time, the U.S. incurs budget deficits; to compensate for that, the Government runs budget surpluses half of the time too.arrow_forwardWhich system of taxes is best? Why does that system is the most effective way for the government to generate revenue and maintain our economy's growth?arrow_forward
- Define fiscal policy and explain the role of income taxes and government spending as fiscal policy tools.arrow_forwardIf the objective of fiscal policy is to stabilize (achieve full-employment (potential) GDP and maintain price level stability (control inflation)) the economy and promote economic growth, then would an annually balanced budget be effective? Why or why not?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 hardwararrow_forward
- 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_forwardTRUE/FALSE Spending by local governments to stimulate or slow down their local economies is an example of fiscal policy.arrow_forwardIf you were given the chance to make your own 2021 National Budget Plan, which of the executive departments of the Philippines would get the lion's share of the budget? (Note: Please choose the Department of Health since we are in the middle of the pandemic.) GUIDE QUESTIONS Why did you choose that particular department to receive the lion's share of the budget? Explain briefly. What are the projects and programs that should be implemented? Are these revenue expenditures or capital expenditures? Explain. How would be these projects implemented? Are these for the long-term and on a by-phase basis? Where would be the location of the projects? Rural areas and/or urban areas? How long do you see the department getting the lion's share? Justify the forecast. References:https://dbm.gov.ph/images/pdffiles/201229-2021-Budget-at-a-Glance.pdfhttps://www.dbm.gov.ph/wp-content/uploads/BESF/BESF2009/I2.pdfThank you!arrow_forward
- Which of the following is an example of active fiscal policy? Government expenditures rise during a recession because unemployment insurance benefits increase. The government runs a budget deficit during a recession because income tax collections fall. Congress passes a tax cut after the beginning of a recession with the aim of stimulating the economy. All of the above None of the above Expound your answer by discussing it in 150 words only.arrow_forwardWhy are expenditures such as crime prevention and education typically done at the state and local level rather than at the federal level?arrow_forwardWhat are the short-run and long-run implications when it comes to government spending changes versus tax changes?arrow_forward
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