Homework Answers
The statement which is not correct is D) increasing the money supply is an important instrument of discretionary fiscal policy.
Increasing the money supply is an important instrument of discretionary monetary policy and not discretionary fiscal policy. Hence this option is not correct.
Built - in- stability is term with respect to goverment policies that automatically tends to stabilize the economy when it moves up or goes into recession. Hence part a is true.
Expansionary fiscal policy leads to increament in GDP, this is why it is used when economy is in recession. Hence part b is also true.
Budget deficit is the excess of government expenditure over government revenue. Hence option c is true.
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(a) Which one of the following statements is not correct? Built-in stability implies there is automatic...
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...
QUESTION 1 Which of the following is an example of an automatic fiscal policy stabilizer? a....
QUESTION 1 Which of the following is an example of an automatic fiscal policy stabilizer? a. Tax revenues fall as real GDP decreases. b. Congress decides to cut spending on national defense. c. Congress cuts individual income tax rates. d. Tax revenues rise after Congress raises corporate tax rates. QUESTION 7 When a country's economy is producing at a level that is less than its potential GDP, the standardized employment deficit will show a ________ than the actual deficit. a....
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...
10.) Which of the following is an example of an automatic stabilizer? A. The reduction in...
10.) Which of the following is an example of an automatic stabilizer? A. The reduction in the money supply that occurs as banks become less willing to make loans during a recession B. The reduction in real wages that occurs as the economy goes into a recession C. The increase in government spending that occurs as the result of new spending bills passed by Congress D. The rise in tax revenue that occurs as a result of growth in real...
(1) Which of the following is not a tool of fiscal policy? Government spending Taxes Tax...
(1) Which of the following is not a tool of fiscal policy? Government spending Taxes Tax incentives Private investment (2) Which of the following statements helps to explain why the economy can be slow to recover from a recession? Workers are less motivated because of reduced expectations, which reduces total output. There is not as much money in circulation to fuel new investment. Wages do not fall quickly, which delays an adjustment to a higher output level....
Suppose an economy is running a government budget deficit. Which one of the following will cause...
Suppose an economy is running a government budget deficit. Which one of the following will cause this deficit to become larger? O A decrease in taxes. O A decrease in government purchases. O Expansionary monetary policy. O An increase in exports.
Q1. What are the “automatic” and “discretionary” aspects of fiscal policy and how do they fit...
Q1. What are the “automatic” and “discretionary” aspects of fiscal policy and how do they fit Keynesian fiscal policy to stimulate the economy in a recession, in terms of Government spending, taxation and budget deficits in a Demand driven economy. Q2. Use the consumption function model to explain the impact of government spending using the concepts of the Paradox of Thrift, the Multiplier effect and the role of Expectations (Consumer Confidence.) Q3. Explain two arguments against Keynesian fiscal policy, one...
7. Those who advocate counter-cyclical fiscal policy would agree with all but one of the following...
7. Those who advocate counter-cyclical fiscal policy would agree with all but one of the following statements. Which is the exception? A) Governments should be non-interventionist. B) Automatic stabilizers are not particularly effective. C) The economy is not capable of automatic self-adjustment in response the problems of unemployment and inflation. D) Counter cyclical fiscal policy is a powerful and effective tool. E) Government budget deficits are a less serious problem than income gaps. 8. Assume that the economy is in...
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...
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...
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...
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...
Suppose an economy is running a government budget deficit. Which one of the following will cause this deficit to become larger? O A decrease in taxes. O A decrease in government purchases. O Expansionary monetary policy. O An increase in exports.
7. Those who advocate counter-cyclical fiscal policy would agree with all but one of the following statements. Which is the exception? A) Governments should be non-interventionist. B) Automatic stabilizers are not particularly effective. C) The economy is not capable of automatic self-adjustment in response the problems of unemployment and inflation. D) Counter cyclical fiscal policy is a powerful and effective tool. E) Government budget deficits are a less serious problem than income gaps. 8. Assume that the economy is in...
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...
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...
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