Suppose we are producing at the full-employment level and the current fiscal program is associated with...
Suppose we are producing at the full-employment level and the current fiscal program is associated with a balanced budget. What will be true if the Fed suddenly decides to implement expansionary monetary policy?
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The new appropiate fiscal policy will create a budget deficit |
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The new appropiate fiscal policy will create a budget surplus |
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If federal government doesn't change the fiscal program, the economy will end up with lower output and higher price |
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All of the above |
Homework Answers
The new appropriate fiscal policy will create a budget deficit
Explanation: Expansionary fiscal policy would involve higher government spending, which will result in fiscal deficit.
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Suppose we are producing at the full-employment level and the
current fiscal program is associated with...
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I. The economy of Zarland is operating below the full-employment level of output with a balanced budget. (a) Draw a correctly labeled graph of short-run aggregate supply, long-run aggregate supply, a...
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1. Starting at Full Employment, explain what happens to output,
the price level, and
employment ) in each of these cases and use the AD/AS diagram
(use arrows and new
lines) to show the direction of changes
b. Consumers become more pessimistic about the economy
2. Describe the main tools of monetary policy the Federal
Reserve uses and how they would use
them if there were a financial crisis to stabilize the
economy
3. a) the federal government was required...
23. Suppose a government finances its expansionary fiscal policy by borrowing from the public. Joseph is concerned that this will increase the demand for loanable funds, drive up interest rates, and leave less loanable money available for consumers and businesses. Joseph is concerned about the: A) boomerang effect. B) expansionary countereffect. C) ricochet effect. D) crowding-out effect. 24. Suppose the economy is growing at 4% a year, inflation is measured at 0.5% a year, and the federal deficit is relatively...
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...
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