Homework Answers
Answer - (b) increases in government spending during
recession, and tax increases during inflation
Reason - During a recession , consumers reduce spending
and increase savings. Thus an increase in government spending acts
as a multiplier effect, where people have more to spend which
increases Aggregate Demand. On the other hand, during an inflation,
where price levels are high, that is there will be an increase in
income levels. Thus, the government being a large government would
want to act an increase tax rates to gain more.
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An economist who favors larger government would recommend Multiple Choice tax cuts during recession and reductions...
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Which of the following expansionary fiscal policy changes would be most favored by those economists who think that the government is too large and inefficient? Multiple Choice a $40 billion tax cut o $10 billion tax cut and $30 billion Increase in government spending o $20 billion tax cut and $20 billion increase in government spending o $40 bilion incresse in government spending
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If an economy is in a recession and the government opts for an expansionary fiscal policy...
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Identify the true, false, and uncertain arguments. Economists that favor tax cuts recommend them as a first line of defense during recessions. During the 2008-2009 downturn, the Fed favored monetary policy over fiscal policy In 2009, economists in the Obama administration estimated that the tax cuts multiplier was lower than the multiplier of government purchases Critics of government spending hikes worry about the additional savings brought about by tax cuts The 2008-2009 downturn would have been worse if there had...
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Macroecomics multiple choice a) Other things constant, if the government cuts the net tax rate, lowering NT from NT = t...
Macroecomics multiple
choice
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QUESTION 49 Which of the four multiple-choice answers would an economist say provides the best justification...
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1 pts D Question 9 Let's assume that the economy is experiencing a recession. A government...
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the government cuts tases or inereases government spending 20) ) the aggregate demand curve shifts to...
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Multiple Choice: 1) Assume the MPC is 0.75 and lump sum taxes are collected by the government. What is the governm...
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Multiple Choice Questions Question 1 (1 point) Which of the following is a microeconomic question (not...
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Which of the following expansionary fiscal policy changes would be most favored by those economists who think that the government is too large and inefficient? Multiple Choice a $40 billion tax cut o $10 billion tax cut and $30 billion Increase in government spending o $20 billion tax cut and $20 billion increase in government spending o $40 bilion incresse in government spending
Which of the following expansionary fiscal policy changes would be most favored by those economists who think...
Identify the true, false, and uncertain arguments. Economists that favor tax cuts recommend them as a first line of defense during recessions. During the 2008-2009 downturn, the Fed favored monetary policy over fiscal policy In 2009, economists in the Obama administration estimated that the tax cuts multiplier was lower than the multiplier of government purchases Critics of government spending hikes worry about the additional savings brought about by tax cuts The 2008-2009 downturn would have been worse if there had...
Macroecomics multiple
choice
a) Other things constant, if the government cuts the net tax rate, lowering NT from NT = tọY to NT = t,Y we would expect: an upward shift of the aggregate expenditure curve an increase in the slope the aggregate expenditure curve. a movement down and along the aggregate expenditure curve. O a decrease in the slope of the aggregate expenditure curve b) In an open economy with imports described by the import function: IM 0.25Y and...
QUESTION 49 Which of the four multiple-choice answers would an economist say provides the best justification for 0 when the market mechanism fails to achieve the optimal mix of output. Because the government will encourage the production of private goods Because the government can increase the level f market power of private businesses. government intervention into an e conomy? When the private sector is larger than public sector. QUESTION 50 Which of the four multiple-choice answers would an economist say...
1 pts D Question 9 Let's assume that the economy is experiencing a recession. A government economist advises the president to put pressure on the Federal Reserve Chair to increase the money supply. She also recommends for the government to increase spending on Social Security, welfare programs, roads, highways and other construction projects. According to our text, what are potential disadvantages if this recommendation is implemented? The economy will grow too fast in the short run and unemployment will fall...
the government cuts tases or inereases government spending 20) ) the aggregate demand curve shifts to the right. tne long-run aggregate supply curve shifts to the left. C) the 20) When aggregate demand curve shifts to the left. the short-run aggregate supply curve shifts to the left. t spending without an accompanying increase 21) An increase in govenment spending n taxes demand A) does not increase aggregate B) would effectively eliminate an inflationary gap. Q mquires additional govemment borrowing spending...
Multiple Choice: 1) Assume the MPC is 0.75 and lump sum taxes are collected by the government. What is the government tax multiplier? A)-1.33 B) - 25 C) - 75 D) -4 E) -3 , which the recessionary gap. 2) During a Recession, the MPC tends to a) Increase, increases b) Decrease, decreases c Decrease, increases d) Increase, decreases 3) Suppose that the MPC is.75 and the US Federal Government reduces taxes by 10 million dollars. After 3 rounds of...
Multiple Choice Questions Question 1 (1 point) Which of the following is a microeconomic question (not a macroeconomic question)? Will raising cigarette taxes cause cigarette sales to fall? Will a decrease in the income tax rate help the economy recover from a recession? What is the effect of a recession on the number of people who are employed and the total number of workers in the economy who lose their job? Will an increase in consumer spending cause higher inflation?
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