If the federal government increased spending then you could expect to see A recession A decrease...
- If the federal government increased spending then you could expect to see
A recession
A decrease in interest rates
An increase in interest rates
A decrease in the nation debt
Homework Answers
Option C.
- Federal government usually uses expansionary fiscal policy to combat recession in an economy. It does so by increasing its spending on the ecomomy and people and by cutting the taxes.
- When it increases the spending, there is a crowding out effect because the government needs to borrow more money to finance it's expenses, which increases the demand for money and further leads to an increase in the interest rates.
Add Answer to:
If the federal government increased spending then you could
expect to see
A recession
A decrease...
1.67 pts When the Federal Reserve purchases government treasury bonds from commercial banks, we can expect...
1.67 pts When the Federal Reserve purchases government treasury bonds from commercial banks, we can expect interest rates in the economy to As a result, spending by firms and households is likely to decrease : increase increase : increase increase : decrease decrease : decrease
When government spending increases and taxes are increased by an equal amount, interest rates: A. Increase B. decrease C....
When government spending increases and taxes are increased by an equal amount, interest rates: A. Increase B. decrease C. remain the same. D. can vary wildly. Reset Selection
Expansionary fiscal policy ________________ to fight______________. increase the money supply and cut interest rates, recession. decrease...
Expansionary fiscal policy ________________ to fight______________. increase the money supply and cut interest rates, recession. decrease the money supply and raise interest rates, inflation. increase government spending and cut taxes, recession. decrease government spending and raise taxes, inflation.
7. Dawn states: “As a result of a spending increase by the federal government the budget...
7. Dawn states: “As a result of a spending increase by the federal government the budget deficit increase and this will lead to a decrease in Demand in the loanable funds market and result in lower real interest rates. Do you agree or disagree? Carefully Explain.
25. If the spending of the federal government exceeds tax revenue, then the government necessarily a...
25. If the spending of the federal government exceeds tax revenue, then the government necessarily a runs a budget deficit bruns a budget surplus. c. will increase spending. d. will decrease taxos 26. An increase in the budget deficit would cause a a shortage of loanable funds at the original interest rate, which would lead to falling interest rates b. surplus of loanable funds at the original interest rate, which would lead to rising interest rates c. shortage of loanable...
5) The Great Recession beginning in 2007 was caused by a) The Federal Government reducing spending....
5) The Great Recession beginning in 2007 was caused by a) The Federal Government reducing spending. b) The rapid increase and subsequent decline in housing prices. c) Foreign countries reducing their demand for American Goods. d) Baby Boomers retiring from the economy. 6) Suppose that the economy is experiencing a recessionary gap. If you believe in "small government", then the most appropriate policy would be to a) Raise income taxes. b) Lower income taxes. c) Raise government spending. d) Lower...
and ________ are the largest sources of revenue collected by the federal government. Corporate income taxes;...
and ________ are the largest sources of revenue collected by the federal government. Corporate income taxes; excise and other taxes Excise and other taxes; individual income taxes Individual income taxes; social insurance taxes Individual income taxes; corporate income taxes The nation of Hyperbole is in a recession, and the government decides to increase taxes and reduce government spending to reduce the growing deficit. This will ________ aggregate demand and will likely ________ real GDP and employment. decrease; decrease decrease; increase...
_lag. The lag between an increase in government spending and the impact of this increased spending...
_lag. The lag between an increase in government spending and the impact of this increased spending on the economy is called the a. effectiveness b.transmission C. legislative d. data QUESTION 49 Complete crowding out implies that as government increases purchases by $1, a. private spending decreases by $1. b. Real GDP remains unchanged. c. there is an equal offsetting decrease in one or more of the components of private expenditures. d. all of the above e none of the above...
The economy is in a recession. The government increases spending in an effort to move the...
The economy is in a recession. The government increases spending in an effort to move the economy toward full employment (Y*). Money demand is interest sensitive and investment is interest insensitive. explain each step of the adjustment process, graph the process (show both “the crowing out” and the path –process– the economy will follow). How much crowding out would you expect relative to an economy wherein Money demand is interest insensitive and investment is interest sensitive and why.
If the federal government decreases spending or increases taxes, the goal is to move the AD...
If the federal government decreases spending or increases taxes, the goal is to move the AD curve to the left/right and would be done to fight a recession/inflation; If the federal government increases spending or decreases taxes, the goal is to move the AD curve to the left/right and would be done to fight a recession/inflation.
1.67 pts When the Federal Reserve purchases government treasury bonds from commercial banks, we can expect interest rates in the economy to As a result, spending by firms and households is likely to decrease : increase increase : increase increase : decrease decrease : decrease
7. Dawn states: “As a result of a spending increase by the federal government the budget deficit increase and this will lead to a decrease in Demand in the loanable funds market and result in lower real interest rates. Do you agree or disagree? Carefully Explain.
25. If the spending of the federal government exceeds tax revenue, then the government necessarily a runs a budget deficit bruns a budget surplus. c. will increase spending. d. will decrease taxos 26. An increase in the budget deficit would cause a a shortage of loanable funds at the original interest rate, which would lead to falling interest rates b. surplus of loanable funds at the original interest rate, which would lead to rising interest rates c. shortage of loanable...
5) The Great Recession beginning in 2007 was caused by a) The Federal Government reducing spending. b) The rapid increase and subsequent decline in housing prices. c) Foreign countries reducing their demand for American Goods. d) Baby Boomers retiring from the economy. 6) Suppose that the economy is experiencing a recessionary gap. If you believe in "small government", then the most appropriate policy would be to a) Raise income taxes. b) Lower income taxes. c) Raise government spending. d) Lower...
_lag. The lag between an increase in government spending and the impact of this increased spending on the economy is called the a. effectiveness b.transmission C. legislative d. data QUESTION 49 Complete crowding out implies that as government increases purchases by $1, a. private spending decreases by $1. b. Real GDP remains unchanged. c. there is an equal offsetting decrease in one or more of the components of private expenditures. d. all of the above e none of the above...
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