Ans1) the correct option is c) The former requires timely decisions whereas the latter is built into the system
Ans2) the correct option is c) A tax cut adopted to stimulate consumption
1. Discretionary Fiscal Policy differs from Nondiscretionary Fiscal Policy in that: A. the former deals with...
3. The mistiming problem with discretionary fiscal policy results from: A. a delay in recognizing a recession. B. a delay in agreeing on a solution to a recession C. a delay in getting a particular plan implemented with the money getting into peoples' hands. D. all of the options are correct. 4. An example of nondiscretionary fiscal policy would be: A. the existence of the progressive federal income tax. B. a federal jobs program adopted to stimulate consumption. C. a...
1,2,3,4,5,6,7,8,9,10 1.Explain the effect of a discretionary cut in taxes of $40 billion on the economy when the economy’s marginal propensity to consume is .75. How does this discretionary fiscal policy differ from a discretionary increase in government spending of $40 billion? 2.Explain what is meant by a built-in stabilizer and give two examples. 3.Differentiate between discretionary fiscal policy and nondiscretionary or built-in stabilization policy. 4.What does the “standardized budget” measure and of what significance is this concept? 6.What are...
1. Expain the effect of a discretionary cut in taxes of $40 billion on the economy when the economy’s marginal propensity to consume is .75. How does this discretionary fiscal policy differ from a discretionary increase in government spending of $40 billion? 2.Explain what is meant by a built-in stabilizer and give two examples. 3.Differentiate between discretionary fiscal policy and nondiscretionary or built-in stabilization policy. 4.What does the “standardized budget” measure and of what significance is this concept? 5.What are...
Discretionary fiscal policy A involves only a change in personal income tax rates. B. is triggered by the state of the economy. C. requires action by Parliament. D.occurs during recessions but not during expansions.
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...
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...
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...
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...
Classify each of the following as discretionary or automatic fiscal policy (or neither) 1. (4 pts) A decrease in tax receipts in a recession 2. (4 pts) Additional expenditure to upgrade highways 3. (4 pts) An increase in the public education budget 1 4. (4 pts) A purchase of $10 Million to treat AIDS sufferers in a foreign country. 5. (4 pts) A cut in funding for national defense during an expansion
Classify each of the following as discretionary or automatic fiscal policy (or neither) 1. (4 pts) A decrease in tax receipts in a recession 2. (4 pts) Additional expenditure to upgrade highways 3. (4 pts) An increase in the public education budget 4. (4 pts) A purchase of $10 Million to treat AIDS sufferers in a foreign country. 5. (4 pts) A cut in funding for national defense during an expansion esi