Homework Answers
Delayed planned construction projects
This means decrease in government purchases that leads to decrease in aggregate demand.
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Suppose the economy is currently in the expansionary stage of the business cycle. Which policy could...
1) of the Central Bank of Kuwait puts in place an expansionary monetary policy, its decision...
1) of the Central Bank of Kuwait puts in place an expansionary monetary policy, its decision is based on A) the fact that the economy is at ful employment B) Expectation of excessive inflation in the future C) the fact that the economy is in an expansion D) Unemployment level is high 2) When the interest rate is set at a very low rate A) the opportunity cost of holding money is very low B) the money demand will shift...
The graph below shows real GDP levels over time. Answer the following questions based on this graph. Business Cycle Rea...
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...
Incorrect Question 8 0/1 pts If the economy is rising above potential real GDP, which of...
Incorrect Question 8 0/1 pts If the economy is rising above potential real GDP, which of the following would be an appropriate fiscal policy to bring the economy back to long-run aggregate supply? A decrease in Ooil prices. government purchases. O taxes. the money supply and an increase in interest rates.
Refer to the figure below. Suppose the economy is in a short-run equilibrium at output Y3...
Refer to the figure below. Suppose the economy is in a short-run
equilibrium at output Y3 and inflation rate
π2. The economy is currently experiencing ______, and
the correct monetary policy response to this situation, to return
the economy to potential GDP, is to ______.
Select one:
a. a recessionary gap; raise taxes
b. an expansionary gap; cut taxes
c. a recessionary gap; increase the money supply
d. an expansionary gap; decrease the money supply
Inflation rate ASI AS2 AD...
If the economy expands past potential real GDP, what would be an appropriate fiscal policy to...
If the economy expands past potential real GDP, what would be an appropriate fiscal policy to bring the economy back to equilibrium at long-run aggregate supply? A Increasing the money supply B Decreasing interest rates C Increasing taxes D Increasing food and housing prices
Econ HW, please help! UTION # FISCAL POLICY NAME the mix of government spending and taxing...
Econ HW, please help!
UTION # FISCAL POLICY NAME the mix of government spending and taxing in order to balance the Fiscal policy is best defined as: uncontrolled government spending, altering the mix of govern budget every fiscal year. changes in govern macroeconomic goals. vernment spending and taxing for the purpose of achieving certain minimizing government expenditures over the fiscal year. , while reases in government spending and lower taxes represent decreases in government spending and higher taxe contractionary fiscal...
An increase in the price level will A) shift the aggregate demand curve to the left.
7) An increase in the price level will A) shift the aggregate demand curve to the left. B) shift the aggregate demand curve to the right. C) move the economy up along the aggregate demand curve. D) move the economy down along the aggregate demand curve. 8) Expansionary monetary policy involves A) reducing money supply and lowering taxes B) increasing money supply to decrease interest rate C) increasing government spending and cutting money supply D) increasing the interest rate and increasing taxes 9) Long-run macroeconomic equilibrium occurs when A) aggregate demand...
1. Which one of the following is not an example of expansionary fiscal policy? a. Increasing...
1. Which one of the following is not an example of expansionary fiscal policy? a. Increasing government spending on unemployment insurance b. Decreasing government spending on education c. Decreasing federal income tax rates d. Increasing government spending on the military e. Decreasing local property taxes 2. In recessions, tax revenues tend to decline and transfer payments like unemployment insurance and food stamps tend to increase, so these programs... a. increase unemployment. b. create budget surpluses during economic downturns. c. are...
1. Suppose in a simple closed economy with MPC = 0.75, the planned investment spending nas...
1. Suppose in a simple closed economy with MPC = 0.75, the planned investment spending nas suddenly fallen, reducing AD and output to a level that below the natural level of output by 100 Million. Assume that the real interest rate is constant so that there is no crowding out of (gross) investment. (a) If the government decided to try to get the output back to the natural level of output using only a change in government spending (AG), by...
1. If the economy is at full employment, increases in government spending: A) have a multiplier...
1. If the economy is at full employment, increases in government spending: A) have a multiplier effect on equilibrium output. B) have no effect on the aggregate price level. C) are primarily absorbed by price increases. D) reduce aggregate output. 2. Which of the following measures is NOT an example of discretionary fiscal policy? A) The unemployment compensation program pays out more money as unemployment rates rise. B) Tax rates are increased in the hope of slowing down the rate...
1) of the Central Bank of Kuwait puts in place an expansionary monetary policy, its decision is based on A) the fact that the economy is at ful employment B) Expectation of excessive inflation in the future C) the fact that the economy is in an expansion D) Unemployment level is high 2) When the interest rate is set at a very low rate A) the opportunity cost of holding money is very low B) the money demand will shift...
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...
Incorrect Question 8 0/1 pts If the economy is rising above potential real GDP, which of the following would be an appropriate fiscal policy to bring the economy back to long-run aggregate supply? A decrease in Ooil prices. government purchases. O taxes. the money supply and an increase in interest rates.
Refer to the figure below. Suppose the economy is in a short-run
equilibrium at output Y3 and inflation rate
π2. The economy is currently experiencing ______, and
the correct monetary policy response to this situation, to return
the economy to potential GDP, is to ______.
Select one:
a. a recessionary gap; raise taxes
b. an expansionary gap; cut taxes
c. a recessionary gap; increase the money supply
d. an expansionary gap; decrease the money supply
Inflation rate ASI AS2 AD...
If the economy expands past potential real GDP, what would be an appropriate fiscal policy to bring the economy back to equilibrium at long-run aggregate supply? A Increasing the money supply B Decreasing interest rates C Increasing taxes D Increasing food and housing prices
Econ HW, please help!
UTION # FISCAL POLICY NAME the mix of government spending and taxing in order to balance the Fiscal policy is best defined as: uncontrolled government spending, altering the mix of govern budget every fiscal year. changes in govern macroeconomic goals. vernment spending and taxing for the purpose of achieving certain minimizing government expenditures over the fiscal year. , while reases in government spending and lower taxes represent decreases in government spending and higher taxe contractionary fiscal...
1. Suppose in a simple closed economy with MPC = 0.75, the planned investment spending nas suddenly fallen, reducing AD and output to a level that below the natural level of output by 100 Million. Assume that the real interest rate is constant so that there is no crowding out of (gross) investment. (a) If the government decided to try to get the output back to the natural level of output using only a change in government spending (AG), by...
1. If the economy is at full employment, increases in government spending: A) have a multiplier effect on equilibrium output. B) have no effect on the aggregate price level. C) are primarily absorbed by price increases. D) reduce aggregate output. 2. Which of the following measures is NOT an example of discretionary fiscal policy? A) The unemployment compensation program pays out more money as unemployment rates rise. B) Tax rates are increased in the hope of slowing down the rate...
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