Homework Answers
Automatic stabilizers are the policy tools which do not require government mandate to act during an economic turmoil . They automatically help to restore equilirbium .
a) In recession , unemployment rises so transfer payments such a unemployment insurance automatically rises which causes more government spending and hence more money supply . People have to pay less taxes also during recession as income level falls , production falls , so disposable income rises .
b) During inflation , many people find employment and economy is operating above potential , so transfer payments fall automatically causing money supply to decline , also taxes rise because people earn more and fall in higher tax slabs .
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6-2 Specifically, in one sentence each, state the main effect regarding tax receipt levels and government...
Determine how each of the following monetary or fiscal policy would shift the aggregate demand curve. Illustrate and explain the following effect. a. As the economy is in the state of recession, the government decided to increase government spen
1. Determine how each of the following monetary or fiscal policy would shift the aggregate demand curve. Illustrate and explain the following effect. a. As the economy is in the state of recession, the government decided to increase government spending. b. Central bank decided to fight an inflationary economy by reducing money supply. c. Under full employment economy, the government has decided to increase taxes on income earned by people.
could abyone help me answering these questions please! Incorrect Question 3 0/1.5 pts The aggregate demand...
could
abyone help me answering these questions please!
Incorrect Question 3 0/1.5 pts The aggregate demand of an open economy is given by the after-tax domestic consumption C, the investment (which depends on the interest rater), the government spending G and net exports X - M: AD = C+I+G+X-M=co + c (1 – t) T+I(r) + G + X - my Co is autonomous consumption, c, is the marginal propensity to consume, and m is the marginal propensity to import....
5. Automatic adjustments to the government budget The following table provides some information on government expenditures (G) and tax revenues (T) at different levels of real GDP in a hypothetic...
5. Automatic adjustments to the government budget The following table provides some information on government expenditures (G) and tax revenues (T) at different levels of real GDP in a hypothetical economy. Throughout this problem you should assume that government transfers (TR) are zero. Real GDP (Billions of dollars) 460 Government Expenditures (G) (Billions of dollars) 72 72 72 Tax Revenues (T) (Billions of dollars) 70 72 74 540 Use the blue line (circle symbols) to plot the government expenditures schedule...
14. (2 pt) Explain the effect of a discretionary cut in taxes of $40 billion on...
14. (2 pt) Explain the effect of a discretionary cut in taxes of $40 billion on the economy when the economy's MPC is .75. How does this discretionary fiscal policy differ from a discretionary increase in government spending of $40 billion? A tax cut of $40 billion will result in initial increase in consumption of S billion). (Note that $10Bil. is saved based on marginal propensity to save (MPS), that is 25 (because 1-MPC-MPS). Then .25 x $40-$10 billion). This...
QUESTION 26 In any country the multiplier effect tells us that: O A. If investments increase...
QUESTION 26 In any country the multiplier effect tells us that: O A. If investments increase Tax revenue will increase B. if investments increase savings will increase C. if investments increases GDP will increase OD. If investments increase consumption will increase QUESTION 27 Which of the following statements is true? A. In Pasadena if government spending is $ 1000 billion and tax revenue is $ 800 billion then Pasadena has a budget surplus OB. in Pasadena if government spending is...
1. If the state of Texas's government collects $127 billion in tax revenues in 2015 and...
1. If the state of Texas's government collects $127 billion in tax revenues in 2015 and total spending in the same year is $128.5 billion, the result will be a: A. budget deficit. B. budget surplus C. decrease in payroll tax. D. decrease in proportional taxes. 2. A government annually spends $7 billion of its total tax revenue to weather related disaster relief, $25 billion to healthcare and $13 billion to education. If the government's annual tax revenue is $132...
1. Suppose in a simple closed economy with MPC = 0.75, the planned investment spending nas...
1. Suppose in a simple closed economy with MPC = 0.75, the planned investment spending nas suddenly fallen, reducing AD and output to a level that below the natural level of output by 100 Million. Assume that the real interest rate is constant so that there is no crowding out of (gross) investment. (a) If the government decided to try to get the output back to the natural level of output using only a change in government spending (AG), by...
For a research study with two levels of Factor A, two levels of Factor B, and n=6 in each treatment condition, what are the degrees of freedom values for the F-ratio evaluating the main effect of Fact...
For a research study with two levels of Factor A, two levels of
Factor B, and n=6 in each treatment condition, what are the degrees
of freedom values for the F-ratio evaluating the main effect of
Factor B? (Please choose correct answer from below options, THANK
YOU)
cfrect and only T factor is manipulated ctio 10,) For a research study with neg levels of factor A, (u2 levels of factor B, and n 6 in eac condition, what are the...
2. Describe and explain the expected effect on state-local bond interest rates of each of the...
2. Describe and explain the expected effect on state-local bond interest rates of each of the following federal changes. (4 points) a. The federal government lowers the maximum federal personal income-tax rate from 39% to 20%. b. The federal government restricts the use of private activity tax- exempt bonds by state-local governments with a federal law.
Which of the following is correct regarding the role of government in the aggregate expenditure model?...
Which of the following is correct regarding the role of government in the aggregate expenditure model? A. Net tax revenues enter the AE function indirectly through its effect on disposable income.Net tax revenues enter the AE function indirectly through its effect on disposable income. B. Transfer payments directly affect aggregate expenditures.Transfer payments directly affect aggregate expenditures. C. Private saving is always smaller than budget balance.Private saving is always smaller than budget balance. D. When government has a budget surplus comma...
could
abyone help me answering these questions please!
Incorrect Question 3 0/1.5 pts The aggregate demand of an open economy is given by the after-tax domestic consumption C, the investment (which depends on the interest rater), the government spending G and net exports X - M: AD = C+I+G+X-M=co + c (1 – t) T+I(r) + G + X - my Co is autonomous consumption, c, is the marginal propensity to consume, and m is the marginal propensity to import....
5. Automatic adjustments to the government budget The following table provides some information on government expenditures (G) and tax revenues (T) at different levels of real GDP in a hypothetical economy. Throughout this problem you should assume that government transfers (TR) are zero. Real GDP (Billions of dollars) 460 Government Expenditures (G) (Billions of dollars) 72 72 72 Tax Revenues (T) (Billions of dollars) 70 72 74 540 Use the blue line (circle symbols) to plot the government expenditures schedule...
14. (2 pt) Explain the effect of a discretionary cut in taxes of $40 billion on the economy when the economy's MPC is .75. How does this discretionary fiscal policy differ from a discretionary increase in government spending of $40 billion? A tax cut of $40 billion will result in initial increase in consumption of S billion). (Note that $10Bil. is saved based on marginal propensity to save (MPS), that is 25 (because 1-MPC-MPS). Then .25 x $40-$10 billion). This...
QUESTION 26 In any country the multiplier effect tells us that: O A. If investments increase Tax revenue will increase B. if investments increase savings will increase C. if investments increases GDP will increase OD. If investments increase consumption will increase QUESTION 27 Which of the following statements is true? A. In Pasadena if government spending is $ 1000 billion and tax revenue is $ 800 billion then Pasadena has a budget surplus OB. in Pasadena if government spending is...
1. Suppose in a simple closed economy with MPC = 0.75, the planned investment spending nas suddenly fallen, reducing AD and output to a level that below the natural level of output by 100 Million. Assume that the real interest rate is constant so that there is no crowding out of (gross) investment. (a) If the government decided to try to get the output back to the natural level of output using only a change in government spending (AG), by...
For a research study with two levels of Factor A, two levels of
Factor B, and n=6 in each treatment condition, what are the degrees
of freedom values for the F-ratio evaluating the main effect of
Factor B? (Please choose correct answer from below options, THANK
YOU)
cfrect and only T factor is manipulated ctio 10,) For a research study with neg levels of factor A, (u2 levels of factor B, and n 6 in eac condition, what are the...
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