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Short Question 3 (10%) Explain what a recessionary gap is and what kind of policy the...
1) Describe the Keynesian prescription to cure a recessionary gap. 2) Describe the Keynesian prescription to...
1) Describe the Keynesian prescription to cure a recessionary gap. 2) Describe the Keynesian prescription to cure an inflationary gap. 3) What is the difference between discretionary & automatic fiscal policy? 4) Explain the difference between zero, incomplete, & complete crowding out. If crowding out is complete, does it call into question the effectiveness of a rise in government purchases in order to remove an economy from a recessionary gap?
a. Define a recessionary gap. Draw the LRAS curve to show a recessionary (contractionary gap) gap....
a. Define a recessionary gap. Draw the LRAS curve to show a recessionary (contractionary gap) gap. b. Show the condition of the labor (and other resource) markets. Draw the labor market diagram next to the AS/AD diagram. c. Show and explain how a recessionary (contractionary) gap is closed using a nonintervention policy. SRAS, Price Level Ø 6 10 7 8 9 Real GDP d. e. Draw the LRAS curve to show an inflationary (expansionary) gap. What is a stabilization policy?...
If the economy is in an inflationary gap, what kind of contractionary fiscal policy can the...
If the economy is in an inflationary gap, what kind of contractionary fiscal policy can the government use to bring the economy back to macroeconomic equilibrium?
What fiscal policy would you recommend to eliminate the inflationary or recessionary gap in the following...
What fiscal policy would you recommend to eliminate the inflationary or recessionary gap in the following scenarios: Real GDP $44,500; potential GDP $46,200; mpe 0.2. O A. If the mpe is 0.2, the multiplier is 1.25. Because there is a recessionary gap of $1,700, the government should increase expenditures by $1,360 or decrease taxes by $6,800. O B. If the mpe is 0.2, the multiplier is 1.25. Because there is an inflatonary gap of $1,700, the government should decrease expenditures...
Fiscal Policy Assume the economy is in a recession. The recessionary output gap has been identified...
Fiscal Policy Assume the economy is in a recession. The recessionary output gap has been identified as $500 billion dollars. The Federal Government wants to act to combat the recession. 1. (4 points) Past data suggests that a $10 million change in spending caused a $200 million change in total output. Use this information to calculate the Government Spending Multiplier. In one sentence, give a definition of the multiplier. 2. (6 points) Using your answer in part (1) calculate the...
1.Outline how counter cyclical fiscal policy and balanced budget fiscal policy would close a recessionary gap....
1.Outline how counter cyclical fiscal policy and balanced budget fiscal policy would close a recessionary gap. Be specific on goals, how each theory would achieve those goals, how they would close the gap, and potential negative effects. 2.According to monetary policy, explain how the Bank of Canada would react to a recession. Be specific on goals, how they would achieve those goals, how they would close the gap, and potential negative effects. 3.Please describe how the PPC curve represents scarcity,...
QUESTION 20 One way to reduce the recessionary gap through fiscal policy is to increase government...
QUESTION 20 One way to reduce the recessionary gap through fiscal policy is to increase government purchases. O increase taxes. O decrease transfer payments. O decrease the MPC. Click Save and Submit to save and submit. Click Save All Answers to save all answers.
Suppse the government wants to use fiscal policy to return the economy from a recessionary gap...
Suppse the government wants to use fiscal policy to return the economy from a recessionary gap to a full-employment equilibrium.What policies mught they consider? with the as-ad graph, discuss the adjustment process in the private sector by the fiscal stimulus
1. What is a recessionary gap? Explain how it can be corrected?
1. What is a recessionary gap? Explain how it can be corrected?
Question 28 (3 points) Suppose the economy currently is in a recessionary gap. The Fed engages...
Question 28 (3 points) Suppose the economy currently is in a recessionary gap. The Fed engages in expansionary monetary policy. The impact of expansionary monetary policy will be to increase short-run aggregate supply, decrease prices, and increase real GDP increase aggregate demand, increase prices, and increase real GDP increase aggregate demand, increase prices, and decrease real GDP increase short-run aggregate supply, decrease in prices, and decrease in real GDP
a. Define a recessionary gap. Draw the LRAS curve to show a recessionary (contractionary gap) gap. b. Show the condition of the labor (and other resource) markets. Draw the labor market diagram next to the AS/AD diagram. c. Show and explain how a recessionary (contractionary) gap is closed using a nonintervention policy. SRAS, Price Level Ø 6 10 7 8 9 Real GDP d. e. Draw the LRAS curve to show an inflationary (expansionary) gap. What is a stabilization policy?...
What fiscal policy would you recommend to eliminate the inflationary or recessionary gap in the following scenarios: Real GDP $44,500; potential GDP $46,200; mpe 0.2. O A. If the mpe is 0.2, the multiplier is 1.25. Because there is a recessionary gap of $1,700, the government should increase expenditures by $1,360 or decrease taxes by $6,800. O B. If the mpe is 0.2, the multiplier is 1.25. Because there is an inflatonary gap of $1,700, the government should decrease expenditures...
Fiscal Policy Assume the economy is in a recession. The recessionary output gap has been identified as $500 billion dollars. The Federal Government wants to act to combat the recession. 1. (4 points) Past data suggests that a $10 million change in spending caused a $200 million change in total output. Use this information to calculate the Government Spending Multiplier. In one sentence, give a definition of the multiplier. 2. (6 points) Using your answer in part (1) calculate the...
QUESTION 20 One way to reduce the recessionary gap through fiscal policy is to increase government purchases. O increase taxes. O decrease transfer payments. O decrease the MPC. Click Save and Submit to save and submit. Click Save All Answers to save all answers.
Question 28 (3 points) Suppose the economy currently is in a recessionary gap. The Fed engages in expansionary monetary policy. The impact of expansionary monetary policy will be to increase short-run aggregate supply, decrease prices, and increase real GDP increase aggregate demand, increase prices, and increase real GDP increase aggregate demand, increase prices, and decrease real GDP increase short-run aggregate supply, decrease in prices, and decrease in real GDP
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