It the consumers in the market are more concerned about the permanent income than current income then the fiscal policy will have to face the Ricardo equivalence i.e. even if there is an increase in the government expenditure people in the market will not increase the consumption because later on government will increase the taxes and reduce the consumption at that point.
This will make the fiscal policy and government deficit ineffective.
2. Determine whether consumers suddenly becoming more concerned about permanent income than about current income would...
Response Questions Part A To D Determine whether each of the following would make fiscal policy more effective or less effective: A decrease in the marginal propensity to consume а. Shorter lags in the effect of fiscal policy b. Consumers suddenly becoming more concerned about permanent income than about current income с. d More accurate measurement of the natural rate of unemployment
Permanent income tax cuts tend to have a greater impact on current consumption than temporary tax cuts because permanent tax cuts affect---------- than temporary tax cuts 1. expectations about unemployment rates more 2. the government's debt positions less 3. expectations about long-run income prospects more 4. market liquidity ( money supply) less
In April 2020, many U.S. adults were concerned about the impact that the coronavirus would have on their health and financial situation. Some people were only concerned about the economic or health impact, and some people were concerned with both. Researchers decided to investigate whether adults' perceptions of the threat of the virus varied based on their age group (younger 18 - 29 versus middle-age 40-59). The researcher found that in a random sample of 100 young adults, 33 were...
1. What do you think about Globalization? 2. Do you think that cultures are becoming more homogenized because of Globalization? 3. Do you see more or less cultural globalization in the future?
Given the following data, which company would be more likely to be concerned about liquidity? Purple Co.2.19 Red Co. Magenta Co. 1.54 Beige Co. 1.41 Quick Ratio Current Ratio 2.42 .91 1.75 1.88 .82 Magenta Co. O Red Co. Beige Co. Purple Co
Braxton is starting a new business. He is concerned about legal liability. He would like to have flow-through taxation. At some point, he would like to be able to easily sell interests in the business, but he does not expect to have more than 20 investors. Braxton does not want to pay self-employment taxes on all income. Which of the following entities would best suit Braxton’s needs?
Environmentalists concerned about the impact of high-frequency radio transmissions on birds found that there was no evidence of a higher mortality rate among hatchlings in nests near cell towers. They based this conclusion on a test using a = 0.05. Would they have made the same decision at a = 0.10? How about a 0.01? Explain Choose the correct answer below. A. Since the significance level is paramount in the experiment design, the researchers would have collected different data when...
Individual consumers are more likely to buy things impulsively than businesses and institutions because there are less people involved in the decision making process and they are more likely to be influenced when making a purchase. At a business/institutional level there is likely more than one individual involved in the decision making process and whatever is purchased must be justifiable within the budget, overall needs of the company, etc. Businesses and institutions purchase mainly based on their needs, but an...
Microeconomics and macroeconomics Determine whether each of the following topics would more Nkely be studied in microeconomics or macroeconomics. MicroeconomicsMacroeconomicsThe optimal interest rate for the Federal Reserve to targetThe effects of government tax policy on long-term economic growth The effect of government regulation on a monopolist's production decisions
Indicate whether the following statements about income distribution, population and poverty are true or false. True 1. About 2.5 billion people, or more than a third of the world's population, live on $2 or less a day. False 2. The richest 20 percent of the world's population receive more than 80 percent of the world's income. 3. The United States with around 5 percent of the world's population produces approximately 25 percent of the world's output. 4. All DVCs lack...