Homework Help Question & Answers

1. A country’s government should ________ when inflation begins to climb to unacceptable levels in the...

1. A country’s government should ________ when inflation begins to climb to unacceptable levels in the economy.

A. shift aggregate demand to the right by using contractionary fiscal policy

B. shift aggregate demand to the right by using expansionary fiscal policy

C. shift aggregate demand to the left by using expansionary fiscal policy

D. shift aggregate demand to the left by using contractionary fiscal policy

2. If the economy is producing less than its potential GDP, ________ will show a smaller deficit than the actual deficit.

A. discretionary fiscal policy

B. the automatic stabilizers

C. expansionary fiscal policy

D. the standardized employment deficit

3. A contractionary fiscal policy by a government may result in which of the following?

A. crowding out of private investment

B. a reduced deficit

C. a reduction in government borrowing

D. lower interest rates

0 0
Add a comment
Answer #1

1-when inflation is climb to unacceptable level of economy then country government should use contractionary fiscal policy so that consumption decreases and the aggregate demand shift toward left.

So option D is the correct statement.

2-if the economy is producing less than its potential GDP the standardized employment deficit will show a smaller deficit than the actual deficit.

3-contractionary fiscal policy are used to decrease the aggregate demand by decreasing consumption , decreasing investment and decreasing government spending.

So option C is the correct statement

Add a comment
Know the answer?
Add Answer to:
1. A country’s government should ________ when inflation begins to climb to unacceptable levels in the...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coin

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • During a recession, if a government uses an expansionary fiscal policy to increase GDP, the: Question...

    During a recession, if a government uses an expansionary fiscal policy to increase GDP, the: Question 21 options: a) aggregate supply curve will shift to the right. b) aggregate supply curve will shift to the left. c) aggregate demand curve will shift to the left. d) aggregate demand curve will shift to the right. Suppose the government passes a new law that decreases tax rates. This policy is… Question 22 options: a) automatic and expansionary b) automatic and contractionary c)...

  • Econ HW, please help! UTION # FISCAL POLICY NAME the mix of government spending and taxing...

    Econ HW, please help! UTION # FISCAL POLICY NAME the mix of government spending and taxing in order to balance the Fiscal policy is best defined as: uncontrolled government spending, altering the mix of govern budget every fiscal year. changes in govern macroeconomic goals. vernment spending and taxing for the purpose of achieving certain minimizing government expenditures over the fiscal year. , while reases in government spending and lower taxes represent decreases in government spending and higher taxe contractionary fiscal...

  • If the economy is producing less than its potential GDP, will show a smaller deficit than...

    If the economy is producing less than its potential GDP, will show a smaller deficit than the actual deficit. the standardized employment deficit the automatic stabilizers. discretionary fiscal policy. expansionary fiscal policy.

  • 1. If the economy is at full employment, increases in government spending: A) have a multiplier...

    1. If the economy is at full employment, increases in government spending: A) have a multiplier effect on equilibrium output. B) have no effect on the aggregate price level. C) are primarily absorbed by price increases. D) reduce aggregate output. 2. Which of the following measures is NOT an example of discretionary fiscal policy? A) The unemployment compensation program pays out more money as unemployment rates rise. B) Tax rates are increased in the hope of slowing down the rate...

  • 1. When countries have severe debt problems: fiscal policy is an especially good idea. expansionary fiscal...

    1. When countries have severe debt problems: fiscal policy is an especially good idea. expansionary fiscal policy can reduce real growth. it makes no difference for fiscal policy. they can continue to borrow forever without any adverse consequences. 2. Increases in government spending financed through additional borrowing will typically: lead to higher taxes. lead to higher interest rates. stimulate both consumption and investment. provide more stimulus than when government spending is financed through higher taxes. 3. In a recession, automatic...

  • all please Question 7 6 pts involves decreases in government spending and increases in taxes, while...

    all please Question 7 6 pts involves decreases in government spending and increases in taxes, while government spending and decreases in taxes. involves increases in contractionary monetary policy; expansionary monetary policy contractionary fiscal policy, expansionary fiscal policy expansionary fiscal policy; contractionary fiscal policy expansionary monetary policy, contractionary monetary policy Question 9 6 pts Which of the following is an example of automatic, expansionary fiscal policy? O Legislation passed to extend unemployment benefits longer than 6 months O Higher personal income...

  • Please just help spent the semester in the hospital and apparently have to do an assignment.....

    Please just help spent the semester in the hospital and apparently have to do an assignment.. 11. Government spending and taxation changes that cause fiscal policy to be expansionary when the economy contracts and contractionary when the economy expands are known as: A) discretionary fiscal policy. B) automatic stabilizers. autonomous spending policies. destabilizing fiscal policies. 12. 4) The government budget balance equals: taxes plus government purchases plus government transfers. taxes minus government purchases minus government transfers. taxes minus government purchases...

  • Check my answers please ?? MULTIPLE CHOICE. Choose the one alternative that best completes the statement...

    Check my answers please ?? MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) 1) The use of government taxes and spending to alter economic outcomes is known as A) Incomes policy Q) Monetary policy B) Foreign trade policy. D) Fiscal policy A- 2) 2) If full-employment output exceeds equilibrium output, greater deficit spending will result A) Smaller recessionary gap C) Smaller inflationary gap. B) Larger recessionary gap. D) None of the choices...

  • 1. When the government increases spending by issuing more bonds, it causes: a) nations currency to...

    1. When the government increases spending by issuing more bonds, it causes: a) nations currency to appreciate b)exports increase c)interest rates decrease d)demand for loanable funds decrease e)decreases merchandise trade deficit 2. When the Fed decreases money supply to combat inflation, it cuases: a)the price of the U.S. dollar to decrease b) capital to flow out of the US c)an increase in the merchandise trade deficit d)an increase in private spending e) a decrease in the interest rates 3. Which...

  • The graph shows an economy below full employment. To restore full employment, the government incr...

    The graph shows an economy below full employment. To restore full employment, the government increases government expenditure by $0.5 trillion. Draw a curve to show the effect of the increase if it is the only change in spending plans. Label the curve ADo AE Price level (GDP price index, 2009-100) Potential GDP The increase in government expenditure sets off a multiplier process. Draw a curve that shows the multiplier effect that returns the economy to full employment. Label it AD,...

Free Homework App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.