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Answer
All else equal, the discretionary fiscal policy that should be used is a tax cut and additional spending on national park facilities. Since this economy is experiencing a recession and lower productivity, it needs to be stimulated through lower taxes for businesses to enter new markets and become productive. Given the rest of the options, these are the best available answer.
A tax hike would be a poor answer since it is not an expansionary move. While a reduction in government purchases may be a viable way to reinvest the saved money in the economy, it isn't a free market move.
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Suppose the economy had been producing at potential GDP but now is in recession. Which of...
help with part c please!!! Suppose that real GDP is currently 51.47 trillion potential GDP is...
help with part c please!!!
Suppose that real GDP is currently 51.47 trillion potential GDP is $1.53 trillion, the government purchases multiplier is 2, and the tax multiplier is -15 a. Holding other factors constant, government purchases will need to be increased by $ 0.03 trillion to bring the economy to equilibrium at potential GDP (Round fo four decimal places as needed.) b. Holding other factors constant, taxes have to be cut by $ 0.04 trillion to bring the economy...
Suppose that real GDP is currently $13.88 trillion and potential real GDP is $14.0 trillion, or...
Suppose that real GDP is currently $13.88 trillion and potential real GDP is $14.0 trillion, or a gap of $1,000 billion. The government purchases multiplier is 3.3, and the tax multiplier is 2.3. Holding other factors constant, by how much will government purchases need to be increased to bring the economy to equilibrium at potential GDP? Government spending will need to be increased by $___ billion. (Enter your response rounded to the nearest whole number.) Holding other factors constant, by...
Problem 4.1 Question Help The new bridge to the United States in Southern Ontario and similar...
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When an economy experiences a recession, it is producing -potential Real GDP -less than potential Real GDP -less or more than potential REAL GDP. it depends on the cause of the recession.
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Suppose the US economy is at Potential GDP. Then, consumers and firms become pessimistic about future...
Suppose the US economy is at Potential GDP. Then, consumers and firms become pessimistic about future economic conditions, and consumption and investment decrease. In response to the decline in consumption and investment, the FED increases the money supply. Congress responds as well approving an increase in government spending and tax cuts. Illustrate this sequence of events using an Aggregate Demand/Aggregate Supply graph. State what happens with Real GDP, Prices, and the Unemployment rate after monetary and fiscal policies are implemented.
Related to Solved Problem #4] Suppose that real GDP is currently $13.1 trillion and potential real...
Related to Solved Problem #4] Suppose that real GDP is currently $13.1 trillion and potential real GDP is $14.0 trillion, or a gap of $900 billion. The government purchases multiplier is 5.0, and the tax multiplier is 4.0 Holding other factors constant, by how much will government purchases need to be increased to bring the economy to equilibrium at potential GDP? Government spending will need to be increased by Sllon. (Enter your response rounded to the nearest whole number.)
During the recent recession sparked by financial crisis, the U.S. economy suffered tremendously. Suppose that, due...
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Suppose that the current equilibrium GDP for a country is $13.5 trillion and that potential GDP...
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help with part c please!!!
Suppose that real GDP is currently 51.47 trillion potential GDP is $1.53 trillion, the government purchases multiplier is 2, and the tax multiplier is -15 a. Holding other factors constant, government purchases will need to be increased by $ 0.03 trillion to bring the economy to equilibrium at potential GDP (Round fo four decimal places as needed.) b. Holding other factors constant, taxes have to be cut by $ 0.04 trillion to bring the economy...
Problem 4.1 Question Help The new bridge to the United States in Southern Ontario and similar construction projects elsewhere in the country would be expected to help the economy in the short run, because O A. the use of discretionary fiscal policy would create an one time increase in real GDP but result in a job-less recovery. O B. the use of discretionary fiscal policy would create an one time increase in real GDP and employment. O C. the use...
If the economy is producing less than its potential GDP, will show a smaller deficit than the actual deficit. the standardized employment deficit the automatic stabilizers. discretionary fiscal policy. expansionary fiscal policy.
Suppose the US economy is at Potential GDP. Then, consumers and firms become pessimistic about future economic conditions, and consumption and investment decrease. In response to the decline in consumption and investment, the FED increases the money supply. Congress responds as well approving an increase in government spending and tax cuts. Illustrate this sequence of events using an Aggregate Demand/Aggregate Supply graph. State what happens with Real GDP, Prices, and the Unemployment rate after monetary and fiscal policies are implemented.
Related to Solved Problem #4] Suppose that real GDP is currently $13.1 trillion and potential real GDP is $14.0 trillion, or a gap of $900 billion. The government purchases multiplier is 5.0, and the tax multiplier is 4.0 Holding other factors constant, by how much will government purchases need to be increased to bring the economy to equilibrium at potential GDP? Government spending will need to be increased by Sllon. (Enter your response rounded to the nearest whole number.)
During the recent recession sparked by financial crisis, the U.S. economy suffered tremendously. Suppose that, due to the recession U.S. GDP dropped from $14 trillion to $12.5 trillion. This fall in GDP was due to a drop in consumption of $1 trillion and a drop in investment of $500 billion. The U.S. government, under the Obama administration, responded to this recession by increasing government purchases Instructions: Round your answer to one decimal place a. Suppose that government spending had no...
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