Suppose that economic policy makers want to decrease real GDP by $500 with as little impact on the budget balance as possible. Should they reduce government purchases of goods and services, reduce transfer payments, or increase taxes? Can someone answer this question ? thanks |
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Suppose that economic policy makers want to decrease real GDP by $500 with as little impact...
Assume that GDP = $10,000 and the MPC = 0.75. If policy makers want to increase GDP by 30 percent, and they want to change taxes and government spending by equal amounts, how much would government spending and taxes each need to increase? Group of answer choices $1,000 $300 $3,000 $750
Suppose policy makers want to increase net exports (NX) and keep output (Y) constant. Which of the following policies would most likely achieve this? A. an increase in government spending B. a real depreciation C.an increase in government spending and a decrease in the real exchange rate D. a decrease in the real exchange rate and a tax increase
The graph below shows real GDP levels over time. Answer the following questions based on this graph. Business Cycle Real GDP Time a. At time T, what is the economy experiencing? Full-employment output An economic contraction An economic expansion b. In order to smooth out the business cycle, what type of fiscal policy should the government undertake? Contractionary fiscal policy Expansionary fiscal policy c. What type of actions might the government take? An increase in both taxes and government purchases...
The graph below shows real GDP levels over time. Answer the following questions based on this graph Business Cycle Real GDP a. At time T. what is the economy experiencing? Full employment output An economic expansion - An economic contraction a. At time t, what is the economy experiencing? O Full-employment output O An economic expansion O An economic contraction b. In order to smooth out the business cycle, what type of fiscal policy should the government undertake? O Contractionary...
The graph below shows real GDP levels over time. Answer the following questions based on this graph. Business Cycle Real GDP Time a. At time T, what is the economy experiencing? An economic contraction Full-employment output An economic expansion b. In order to smooth out the business cycle, what type of fiscal policy should the government undertake? Expansionary fiscal policy Contractionary fiscal policy c. What type of actions might the government take? An Increase in taxes and a decrease in...
1. Suppose the federal government observes a decrease in net exports. Examine this event in terms of the aggregate demand and aggregate supply model. a. The decrease in net exports will cause (Click to select) [a decrease in short-run aggregate supply / an increase in short-run aggregate supply / an increase in aggregate demand / a decrease in aggregate demand]. b. This will lead to (Click to select) [a decrease / an increase] in the price level and (Click to select)...
a. At time T, what is the economy experiencing?
Full-employment output
An economic contraction
An economic expansion
b. In order to smooth out the business cycle, what type of
fiscal policy should the government undertake?
Contractionary fiscal policy
Expansionary fiscal policy
c. What type of actions might the government take?
An increase in taxes and a decrease in government purchases
An increase in both taxes and government purchases
A decrease in taxes and an increase in government purchases
A decrease...
When considering economic growth, many policy makers focus on real gross domestic product (GDP) per capita since it! takes into account the potentially distorting effects of capital flows. O population change. O pollution. O unemployment. Any large, sustainable increase in real GDP must be due to steadily increasing levels of research and development. labor productivity. birth rates. O levels of labor force participation.
Suppose that policymakers want to decrease the fiscal deficit.
3. Suppose that policymakers want to decrease the fiscal deficit A. Use an IS-LM graph to illustrate the effect on equilibrium GDP and interest rates if government spending is decreased, explaining briefly what happens. B. Use an IS-LM graph to illustrate the effect on equilibrium GDP and interest rates if taxes are increased, explaining briefly what happens. C. Suppose the policymakers want to reduce the fiscal deficit without decreasing GDP. Is...
#6 Consider an economy that is operating at the full-employment level of real GDP with MPC=0.7 MPC=0.7 . The short-run effect on equilibrium real GDP of a $50 billion increase in government spending ( G G ), balanced by a $50 billion increase in taxes, is...…………. abillion (Increase or Decrease) in real GDP. #7 Suppose that the MPC in a country is 0.9. Complete the following table by calculating the change in GDP predicted by the multiplier process given each...