Ignoring any supply−side effects, suppose the government is considering cutting taxes by $100 billion or increasing...
Ignoring any supply−side effects, suppose the government is considering cutting taxes by $100 billion or increasing government expenditures on goods and services by $100 billion. Then
A.
the tax cut would increase aggregate demand and the increase in government expenditure would decrease aggregate demand.
B.
both policies would increase aggregate demand but the increase in government expenditure has a smaller effect.
C.
both policies would increase aggregate demand by the same amount.
D.
both policies would increase aggregate demand but the tax cut has a smaller effect.
E.
the tax cut would decrease aggregate demand and the increase in government expenditure would increase aggregate demand
Homework Answers
option D is correct
both policies would increase aggregate demand but the tax cut has a smaller effect. (tax multiplier < expenditure multiplier)
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Ignoring any supply−side effects, suppose the
government is considering cutting taxes by $100 billion or
increasing...
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Explain the change in aggregate demand when 1)Taxes are increased by $100 Billion 2. (7 pts)...
Explain the change in aggregate demand when
1)Taxes are increased by $100 Billion
2. (7 pts) Both 1 and 2 occur simultaneously (please try to do
it ASAP)
that was what the instructor privided
Problem 4 "Monetary Policy" (20 points) Explain the change in aggregate demand when: 1. (6 pts) Government expenditure on goods and services increases by $100 Billion 2. (7 pts) Taxes are increased by $100 Billion 3. (7 pts) Both 1 and 2 occur simultaneously
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Explain the change in aggregate demand when
1)Taxes are increased by $100 Billion
2. (7 pts) Both 1 and 2 occur simultaneously (please try to do
it ASAP)
that was what the instructor privided
Problem 4 "Monetary Policy" (20 points) Explain the change in aggregate demand when: 1. (6 pts) Government expenditure on goods and services increases by $100 Billion 2. (7 pts) Taxes are increased by $100 Billion 3. (7 pts) Both 1 and 2 occur simultaneously
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