Refer to the above diagram, in which Qf is the
full-employment output. An expansionary fiscal policy would be most
appropriate if the economy's present aggregate demand curve were
at:
Question 3 options:
|
AD0. |
|
|
AD2. |
|
|
AD3. |
|
|
None of these. |
Homework Answers
Answer: AD0
Expansionary fiscal policy is used to pull the economy out of recession and to increase the money supply. Expansionary fiscal policy causes an rightward shift of the aggregate demand curve, which means increase in aggregate demand, increase in output and increase in employment. Refer to the above diagram, in which Qf is the full-employment output. An expansionary fiscal policy would be most appropriate if the economy's present aggregate demand curve were at AD0.
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Refer to the above diagram, in which Qf is the
full-employment output. An expansionary fiscal policy...
EXERCISE1: ADAD, AD, Refer to the diagram, in which Of is the full- employment output. Price...
EXERCISE1: ADAD, AD, Refer to the diagram, in which Of is the full- employment output. Price Level 1. A contractionary fiscal policy would be most appropriate if the economy's present aggregate demand curve were at Real GDP 2. An expansionary fiscal policy would be most appropriate if the economy's present aggregate demand curve were at 3. If the economy's present aggregate demand curve is , government should undertake neither an expansionary nor a contractionary fiscal policy. 4. At what AD...
Refer to figure above, An expansionary fiscal policy would be most effective in raising output with little or no inflation when the aggregate demand curve shifts from
1. Refer to figure above, An expansionary fiscal policy would be most effective in raising output with little or no inflation when the aggregate demand curve shifts from a. AD1 to AD2.b. AD3 to AD4.c. AD5 to AD6.d. AD1 to AD6.
FISCAL POLICY IN-CLASS WORKSHEET 2 This question explores the role of expansionary and contractionary fiscal policy...
FISCAL POLICY IN-CLASS WORKSHEET 2 This question explores the role of expansionary and contractionary fiscal policy in the Aggregate Demand and Aggregate Supply model. You will use schedules for an aggregate demand line and an aggregate supply line to identify the equilibrium price level and real GDP in a macroeconomy. Additionally, you will compare the short-run equilibrium level of real GDP to the full employment level of real GDP to identify desirable fiscal policies. Below, you are provided the schedules...
Which of the following policy according to Keynes is best suited to stimulate an economy that...
Which of the following policy according to Keynes is
best suited to stimulate an economy that is experiencing a downturn
in the business cycle?
(a)A contractionary monetary policy
(b)A contractionary fiscal policy
(c)An expansionary fiscal policy
(d)An expansionary monetary policy
The vertical portion of the aggregate supply curve or AS curve
in Figure#1is:
(a)The long run supply curve
(b)The point of full employment GDP
(c)The point of full capacity utilization
(d)All of the above
Figure#1 AS Price Level AD5 PO...
The graph shows an economy that is above full employment. To restore full employment, the government...
The graph shows an economy that is above full employment. To restore full employment, the government decreases government expenditure by $0.5 trillion. Draw a curve to show the effect of the decrease if this is the only change in spending plans. Label the curve AD0-ΔE The decrease in government expenditure sets off a multiplier process. Draw a curve that shows the multiplier effect that returns the economy to full employment. Label it AD Draw a point at the full-employment equilibrium...
An expansionary fiscal policy is shown as a: A. Rightward shift in the economy's aggregate demand...
An expansionary fiscal policy is shown as a: A. Rightward shift in the economy's aggregate demand curve D. Leftward shift in the economy's aggregate demand curve
Figure: AD–AS Refer to Figure: AD–AS. Assume that the economy is in long-run equilibrium. If the...
Figure:
AD–AS
Refer to Figure: AD–AS. Assume that the economy
is in long-run equilibrium. If the Federal Reserve were to lower
the targeted federal funds rate we would most likely expect:
there will be a downward movement along the aggregate demand
curve AD1.
the aggregate demand curve will stay unchanged at
AD1.
the aggregate demand curve will shift to
AD3.
the aggregate demand curve will shift to
AD2.
LRAS Aggregate price level SRAS AD, AD AD, Y₂ YpY, Real GDP
3/21/2019 Assignment Print view ECONOMICS Award: 10.00 polints Contractionary Fiscal Pollcy- Grap...
3/21/2019 Assignment Print view ECONOMICS Award: 10.00 polints Contractionary Fiscal Pollcy- Graphlcally Exercise 4 The graph below depicts an economy where a decline in aggregate demand has caused a recession. This economy's current level of real GDP (Y1) is below its long-run equilibrium, which is illustrated by the long-run aggregate supply curve(LRAS), and a price level (P1)below the equilibrium value of Pe a. Without any fiscal policy, we expect the economy to eventually return to full employment on its own....
During a recession, if a government uses an expansionary fiscal policy to increase GDP, the: Question...
During a recession, if a government uses an expansionary fiscal policy to increase GDP, the: Question 21 options: a) aggregate supply curve will shift to the right. b) aggregate supply curve will shift to the left. c) aggregate demand curve will shift to the left. d) aggregate demand curve will shift to the right. Suppose the government passes a new law that decreases tax rates. This policy is… Question 22 options: a) automatic and expansionary b) automatic and contractionary c)...
Investment Demand 0 $75 150 225 Investment (s) 0 $50 100 150 Investment (S) AS $150) AD, (I-$100) Real GDP Refer to the graphs above, in which the numbers in parentheses near the AD1, AD2, and A...
Investment Demand 0 $75 150 225 Investment (s) 0 $50 100 150 Investment (S) AS $150) AD, (I-$100) Real GDP Refer to the graphs above, in which the numbers in parentheses near the AD1, AD2, and AD3 labels indicate the levels of investment spending associated with each curve. All figures are in billions. What is the desired level of investment spending in this economy if it is to achieve a noninflationary full-employment level of real GDP? investment spending associated with...
EXERCISE1: ADAD, AD, Refer to the diagram, in which Of is the full- employment output. Price Level 1. A contractionary fiscal policy would be most appropriate if the economy's present aggregate demand curve were at Real GDP 2. An expansionary fiscal policy would be most appropriate if the economy's present aggregate demand curve were at 3. If the economy's present aggregate demand curve is , government should undertake neither an expansionary nor a contractionary fiscal policy. 4. At what AD...
Which of the following policy according to Keynes is
best suited to stimulate an economy that is experiencing a downturn
in the business cycle?
(a)A contractionary monetary policy
(b)A contractionary fiscal policy
(c)An expansionary fiscal policy
(d)An expansionary monetary policy
The vertical portion of the aggregate supply curve or AS curve
in Figure#1is:
(a)The long run supply curve
(b)The point of full employment GDP
(c)The point of full capacity utilization
(d)All of the above
Figure#1 AS Price Level AD5 PO...
The graph shows an economy that is above full employment. To restore full employment, the government decreases government expenditure by $0.5 trillion. Draw a curve to show the effect of the decrease if this is the only change in spending plans. Label the curve AD0-ΔE The decrease in government expenditure sets off a multiplier process. Draw a curve that shows the multiplier effect that returns the economy to full employment. Label it AD Draw a point at the full-employment equilibrium...
Figure:
AD–AS
Refer to Figure: AD–AS. Assume that the economy
is in long-run equilibrium. If the Federal Reserve were to lower
the targeted federal funds rate we would most likely expect:
there will be a downward movement along the aggregate demand
curve AD1.
the aggregate demand curve will stay unchanged at
AD1.
the aggregate demand curve will shift to
AD3.
the aggregate demand curve will shift to
AD2.
LRAS Aggregate price level SRAS AD, AD AD, Y₂ YpY, Real GDP
3/21/2019 Assignment Print view ECONOMICS Award: 10.00 polints Contractionary Fiscal Pollcy- Graphlcally Exercise 4 The graph below depicts an economy where a decline in aggregate demand has caused a recession. This economy's current level of real GDP (Y1) is below its long-run equilibrium, which is illustrated by the long-run aggregate supply curve(LRAS), and a price level (P1)below the equilibrium value of Pe a. Without any fiscal policy, we expect the economy to eventually return to full employment on its own....
Investment Demand 0 $75 150 225 Investment (s) 0 $50 100 150 Investment (S) AS $150) AD, (I-$100) Real GDP Refer to the graphs above, in which the numbers in parentheses near the AD1, AD2, and AD3 labels indicate the levels of investment spending associated with each curve. All figures are in billions. What is the desired level of investment spending in this economy if it is to achieve a noninflationary full-employment level of real GDP? investment spending associated with...
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