Foundations of Economics (8th Edition)
8th Edition
ISBN: 9780134486819
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
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Chapter 32, Problem 4MCQ
To determine
Concept of automatic fiscal policy.
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Students have asked these similar questions
9.
The lag associated with fiscal policy can:
magnify economic fluctuations.
stimulate output beyond full employment.
depress output below full employment.
all of the above.
Question 18
Question 16
If the economy is in stagflation, what would eventually happen as a result if no fiscal policy is used and the
economy adjusts back to full employment?
Prices would increase and unemployment would increase
O Prices would increase and unemployment would fall
Prices would fall and unemployment would increase
Prices would fall and unemployment would fall
Chapter 32 Solutions
Foundations of Economics (8th Edition)
Ch. 32 - Prob. 1SPPACh. 32 - Prob. 2SPPACh. 32 - Prob. 3SPPACh. 32 - Prob. 4SPPACh. 32 - Prob. 5SPPACh. 32 - Prob. 6SPPACh. 32 - Prob. 7SPPACh. 32 - Prob. 8SPPACh. 32 - Prob. 9SPPACh. 32 - Prob. 10SPPA
Ch. 32 - Prob. 1IAPACh. 32 - Prob. 2IAPACh. 32 - Prob. 3IAPACh. 32 - Prob. 4IAPACh. 32 - Prob. 5IAPACh. 32 - Prob. 6IAPACh. 32 - Prob. 7IAPACh. 32 - Prob. 8IAPACh. 32 - Prob. 9IAPACh. 32 - Prob. 10IAPACh. 32 - Prob. 11IAPACh. 32 - Prob. 1MCQCh. 32 - Prob. 2MCQCh. 32 - Prob. 3MCQCh. 32 - Prob. 4MCQCh. 32 - Prob. 5MCQCh. 32 - Prob. 6MCQCh. 32 - Prob. 7MCQCh. 32 - Prob. 8MCQ
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- What is the main reason for employing expansionary fiscal policy during a recession?arrow_forwardWhat is the main reason for employing contractionary fiscal policy in a time of strong economic growth?arrow_forward43 _____ are elements of fiscal policy that automatically change when income changes. a. Budget deficits b. Automatic stabilizers c. Supply-side shocks d. Exchange rates e. Statistical discrepanciesarrow_forward
- 2. The U.S. economy is in recession and has a large recessionary gap. Describe what automatic fiscal policy might occur. Describe a fiscal stimulus that could be used that would not increase the budget deficit. A. What are the levels of employment and potential GDP in OilPatch, what is the real wage rate paid by employers, and what is the after-tax real wage rate received by workers?arrow_forward#4arrow_forwardAlert dont submit AI generated answer.arrow_forward
- Discuss Expansionary Fiscal Policy. Who is responsible for implementing fiscal policy? What may be adjusted to implement the policy?According to studies, fiscal policy can be slow to react to economic situations. Identify and discuss one reason why this may occur.arrow_forwardIn a recession, needs-tested spending ________ and induced taxes ________. increases; increase decreases; increase increases; decrease decreases; decrease increase; do not change Discretionary fiscal policy is defined as fiscal policy initiated by an act of Congress. left to the discretion of military authorities. with multiplier effects. initiated by a Presidential proclamation. triggered by the state of the economy. If government expenditure on goods and services increase by $100 billion, then aggregate demand increases by $100 billion. decreases by more than $100 billion. increases by more than $100 billion. increases by less than $100 billion. remains unchanged. The magnitude of the tax multiplier is ________ the magnitude of the government expenditure multiplier. smaller than greater than exactly one half the inverse of equal to Suppose the economy is in an equilibrium in which real GDP is less than potential GDP. To increase…arrow_forwardAnswer this question for me mate. Much appreciated. :)arrow_forward
- Fiscal stance refers to: Select one: A. A government that takes a tough stance when it comes to running the country’s finances B. A government that is running a budget deficit C. A government that is running a budget surplus D. Whether a government is pursuing an expansionary or contractionary fiscal policyarrow_forwardHow will a contractionary fiscal policy affect a budget deficit? A.) Debts will decrease B.) No impact C.) Deficit will increase D.) Deficit will decreasearrow_forwardPlease explain briefing how fiscal policy works, what spending multipliers are, when is the spending multiplier small or large, what policy and implementation lags affect the potency of fiscal policy, and what is the relationship between budget deficits and national public debt and their implications.arrow_forward
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