Homework Answers
if the government decreases taxes disposable income increases this causes total consumer spending to increase
A tax increase will lower disposable income as it takes money from households. A tax reduction will increase disposable income as it leaves more money to households. The main driver of consumer demand is disposable income, which accounts for two-thirds of total demand.
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If the government decreases taxes, disposable income O increases. falls. does not change. This causes total...
If the government is required to balance the budget and the economy falls into a recession,...
If the government is required to balance the budget and the economy falls into a recession, which of the actions is a feasible policy response? O invest in infrastructure O increase government spending to stimulate the economy O cut taxes to encourage consumer spending O cut spending equal to the reduction in tax revenue What is a likely consequence of this policy? The negative consequences of the recession are magnified. Unemployment falls due to the economic stimulus. There is hyperinflation...
Question 40 (1 point) ✓ Saved If government spending increases and taxes decrease: implicit liabilities will...
Question 40 (1 point) ✓ Saved If government spending increases and taxes decrease: implicit liabilities will increase. O implicit liabilities will decrease. the public debt will increase. the public debt will decrease. new 1 Question 30 (1 point) The aggregate demand curve: slopes downward for the same reasons that an ordinary demand curve does. slopes downward in part because when the price level falls the real wealth of the public falls, and this induces people to change their consumption. slopes...
If the federal government decreases spending or increases taxes, the goal is to move the AD...
If the federal government decreases spending or increases taxes, the goal is to move the AD curve to the left/right and would be done to fight a recession/inflation; If the federal government increases spending or decreases taxes, the goal is to move the AD curve to the left/right and would be done to fight a recession/inflation.
all please Question 7 6 pts involves decreases in government spending and increases in taxes, while...
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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...
Question 7 6 pts involves increases in involves decreases in government spending and increases in taxes,...
Question 7 6 pts involves increases in involves decreases in government spending and increases in taxes, while government spending and decreases in taxes. contractionary monetary policy, expansionary monetary policy contractionary fiscal policy, expansionary fiscal policy expansionary fiscal policy, contractionary fiscal policy expansionary monetary policy contractionary monetary policy
Why is the multiplier for a change in taxes smaller than for a change in spending?...
Why is the multiplier for a change in taxes smaller than for a change in spending? a. A change in taxes has no effect on aggregate demand, only on aggregate supply. b. A change in taxes directly affects government spending as well, lowering the multiplier. c. A change in taxes affects spending directly, but at a slower rate than spending does. d. A change in taxes affects disposable income and then consumption rather than spending directly. e. All of the...
the consumption function for an economy is C# 180 + 75 Yd (disposable Income) and spending...
the consumption function for an economy is C# 180 + 75 Yd (disposable Income) and spending increases by $800, then the resulting change in national income is a +$2,800 b. 5-3,200 OC $2,800 d. $+3,200 1 points Save Answer QUESTION 5 Assume the actual GOP IS $4800 and the potential GOP is $4400. The economy's MPC is.75. What should the government do to eliminate the gap? a. raise taxes by $100 b. cut taxes by $75 c. increase government spending...
(1) Calculate the government spending multiplier if, an increase in government spending by $5 million increases...
(1) Calculate the government spending multiplier if, an increase in government spending by $5 million increases real GDP by $20 million. Group of answer choices 0.20 0.25 2 5 4 (2) A major benefit of automatic stabilizers is that they: Group of answer choices guarantee a balanced budget over the course of the business cycle. have a tendency to reduce the national debt. moderate the effect of fluctuations in the business cycle. require legislative review by Congress before they can...
Question 16 1 pts In the aggregate expenditures model of the economy, a downward shift in...
Question 16 1 pts In the aggregate expenditures model of the economy, a downward shift in aggregate expenditures can be caused by a decrease in government spending or an increase in taxes. taxes or an increase in government spending. interest rates or a decrease in taxes. saving or an increase in government spending Question 18 As disposable income decreases, consumption and saving both increase. and saving both decrease. increases and saving decreases. decreases and saving increases. Question 19 1 pts...
National saving refers to: disposable income minus consumption. income minus consumption minus government purchases. income minus investment. taxes minus government...
National saving refers to: disposable income minus consumption. income minus consumption minus government purchases. income minus investment. taxes minus government spending.
If the government is required to balance the budget and the economy falls into a recession, which of the actions is a feasible policy response? O invest in infrastructure O increase government spending to stimulate the economy O cut taxes to encourage consumer spending O cut spending equal to the reduction in tax revenue What is a likely consequence of this policy? The negative consequences of the recession are magnified. Unemployment falls due to the economic stimulus. There is hyperinflation...
Question 40 (1 point) ✓ Saved If government spending increases and taxes decrease: implicit liabilities will increase. O implicit liabilities will decrease. the public debt will increase. the public debt will decrease. new 1 Question 30 (1 point) The aggregate demand curve: slopes downward for the same reasons that an ordinary demand curve does. slopes downward in part because when the price level falls the real wealth of the public falls, and this induces people to change their consumption. slopes...
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...
Question 7 6 pts involves increases in involves decreases in government spending and increases in taxes, while government spending and decreases in taxes. contractionary monetary policy, expansionary monetary policy contractionary fiscal policy, expansionary fiscal policy expansionary fiscal policy, contractionary fiscal policy expansionary monetary policy contractionary monetary policy
Why is the multiplier for a change in taxes smaller than for a change in spending? a. A change in taxes has no effect on aggregate demand, only on aggregate supply. b. A change in taxes directly affects government spending as well, lowering the multiplier. c. A change in taxes affects spending directly, but at a slower rate than spending does. d. A change in taxes affects disposable income and then consumption rather than spending directly. e. All of the...
the consumption function for an economy is C# 180 + 75 Yd (disposable Income) and spending increases by $800, then the resulting change in national income is a +$2,800 b. 5-3,200 OC $2,800 d. $+3,200 1 points Save Answer QUESTION 5 Assume the actual GOP IS $4800 and the potential GOP is $4400. The economy's MPC is.75. What should the government do to eliminate the gap? a. raise taxes by $100 b. cut taxes by $75 c. increase government spending...
Question 16 1 pts In the aggregate expenditures model of the economy, a downward shift in aggregate expenditures can be caused by a decrease in government spending or an increase in taxes. taxes or an increase in government spending. interest rates or a decrease in taxes. saving or an increase in government spending Question 18 As disposable income decreases, consumption and saving both increase. and saving both decrease. increases and saving decreases. decreases and saving increases. Question 19 1 pts...
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