Principles of Economics, 7th Edition (MindTap Course List)
7th Edition
ISBN: 9781285165875
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Question
Chapter 30, Problem 4QCMC
To determine
Cause of hyperinflation.
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Students have asked these similar questions
Expansionary fiscal policy will ________GDP and ________ inflation.
a.
raise,lower
b.
lower,lower
c.
lower,raise
d.
raise,raise
An "inflation tax" is often associated with
a
a speculative real estate boom.
the higher interest rates and reduced investment
spending that result from the Government financing its
deficit in financial markets.
the excessive printing of money to finance a budget
deficit.
the increased taxes required to pay off the public debt
which crowd out household spending by reducing
disposable personal income.
d.
Government stabilization policy
a.
can stimulate aggregate demand, but only in the long run.
b.
can stimulate aggregate demand and thereby induce businesses to invest, but the amount is not totally predictable.
c.
can stimulate aggregate demand, but investment spending will not be affected.
d.
cannot influence investment spending
Chapter 30 Solutions
Principles of Economics, 7th Edition (MindTap Course List)
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- The economy goes into recession. Which of the following lists contains things policymakers could do to try to end the recession? a. Increase the money supply, increase taxes, decrease government spending b. Decrease the money supply, increase taxes, decrease government spending c. Increase the money supply, increase taxes, increase government spending d. Increase the money supply, decrease taxes, increase government spendingarrow_forwardIn the United States, the various state governments almost all have laws that require them to balance their budgets, every single year. Such a law would require them to ___during a ____ , resulting in a ____ recession. recession ,boom ,bigger, smaller, decrease taxes, increase taxesarrow_forwardPlease help Fill in the blanks.arrow_forward
- Uganda has an unstable macroeconomic situation and the government has decided to increase its spending to impose an expansionary fiscal policy. What effect it would have on the following; 1. Aggregate Demand and Supply 2. Price level and Output 3. Labour Market 4. Money Market Illustrate with the help of graph and step by step effect.arrow_forwardWhich of the following did the United States undertake to migitate the Great Recession ?arrow_forwardB. Move the Economy back to Potential GDP C. Do nothing D. Decrease Inflation, Lower Interest Rates, Increase Spending 33. If an Economy is producing below Potential GDP, the correct form of action is: A. Expansionary Monetary Policy combined with Contractionary Fiscal Policy B. Contractionary Monetary Policy combined with Expansionary Fiscal Policy C. Expansionary Monetary Policy or Expansionary Contractionary Policy or some Combination of both D. Contractionary Monetary and Fiscal Policy in the Same Amounts xt Predictions: On Editor Suggestions: Showing Et P + 51°arrow_forward
- When the government increases spending (expansionary fiscal policy), inflation and employment are MOST LIKELY to change in which of the following ways? Inflation Level Unemployment Decrease, Increase Decrease, Decrease Increase, Decrease O Increase, Increasearrow_forwardAn increase in taxes would be a good policy A. when there is stagflation, as this policy would push aggregate supply to the right. B. during a recession, as this policy would stimulate aggregate demand. C. during a recession, as this policy would reduce aggregate supply. D. when there is inflation, as this policy would push aggregate demand to the left. E. when there is inflation, as this policy would push aggregate demand to the right. QUESTION 20 An increase in the price level will A. shift the aggregate demand curve to the left. B. shift the aggregate supply curve to the left. C. move the economy down along a stationary aggregate supply curve. D. shift the aggregate demand curve to the right. E. move the economy up along a stationary aggregate demand curve.arrow_forwardThe government runs a large budget deficit and the central bank conducts OMO purchase to buy the debt back: a)Inflation increases b)Inflation decreases c)Inflation stays the same d)Can't tellarrow_forward
- If the government increases expenditures on goods and services and increases taxation by the same amount, which of the following will occur? A. Aggregate demand will be unchanged. B. Aggregate demand will increase. C. Interest rates will decrease. D. The money supply will decrease.arrow_forward1. deflation despite increases in money supply. Take an example 2. Moderate inflation in a good economy. Take an example. 3. What is a Crowding out. Take an examplearrow_forwardGive typing answer with explanation and conclusionarrow_forward
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