Macroeconomics
13th Edition
ISBN: 9781337617390
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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Students have asked these similar questions
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?
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Similar questions
- Which 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_forwardDefine 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_forward
- Which 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_forwardEconomist Arthur Laffer famously pointed out that, in some cases, income tax revenue can actually go up when tax rates go down. Why might this be the case?arrow_forwardBased 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_forward
- TRUE/FALSE Spending by local governments to stimulate or slow down their local economies is an example of fiscal policy.arrow_forwardWhich 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_forwardWhat are the short-run and long-run implications when it comes to government spending changes versus tax changes?arrow_forward
- Do you think that conventional fiscal policy is different from islamic fiscal policy?arrow_forwardplease answer the following questions: numbers 2-5: 2. What is the largest component of the federal budget?A) EntitlementsC) DefenseB) Net interest 3. Which of the following sources of revenue is used to fund government spending?A) corporate contributionsB) political party contributionsC) taxationD) aggregate supply 4. Suppose an economy is slowing and more and more people are losing their jobs and, therefore, paying less income taxes. If policy makers try to avoid a budget deficit by raising taxe rates, this would probably A) help pull the economy out of a depression.B) make the economic slowdown worse.C) increase inflation. 5. Automatic stabilizers:A) work without the need for decisions from Congress or the White House.B) require explicit actions each year by policy makers to become active.C) increase elections during recessions.D) increase aggregate demand during an economic boom.arrow_forwardEconomist Arthur lagger famously pointed out that, in some cases, income tax revenue can actually go up when tax rates go down. Why might this be the case?arrow_forward
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