The government increases its fiscal deficit (raising G and/or cutting T). Draw this on the same...
Homework Answers
When government raises their spending or cut taxes, AD shifts to its right from AD to AD1 and AS remains the same which shifts the output level to Y1 from Y and price level to P1 from P.
Internal balance says that a economy is in full employment level but this is not the case here output level have risen here.
External balance says that a country can have deficit or surplus
as per economic conditions. Thus here economy is in external
balance. 
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The government increases its fiscal deficit (raising G and/or
cutting T). Draw this
on the same...
a. Consider the hypothetical loanable funds market. The government increases its spending (G) by $400 through...
a. Consider the hypothetical loanable funds market. The
government increases its spending (G) by $400 through deficit
financing. What is the effect of this event on household
consumption assuming that disposable income remains unchanged?
It will increase by $100.
It will increase by $200.
It will decrease by $100.
It will decrease by $200.
None of the above.
b. Now, same information like a, (The government increases its
spending (G) by $400 through deficit financing), if the Treasury
Secretary convinces...
Can anyone please help me about Venezuela in analysis of fiscal policy: the venezuala government agency...
Can anyone please help me about Venezuela in analysis of
fiscal policy: the venezuala government agency in charge of
this(.e.g Ministry of Finance/Department of Treasury), its recent
tax and government spending changes, the budget situation(
surplus/deficit), the importance of general government expenditure
in GDP.
And please draw AS AD diagram to illustrate the impacts of the
adjustment in its fiscal policy.
4 countries: Venezuela, South Africa, Turkey, Spain Version 2- Fiscal Policy For the specific country that you have chosen,...
Suppose that the U.S. government significantly increases its budget deficit and finances the resulting debt by...
Suppose that the U.S. government significantly increases its
budget deficit and finances the resulting debt by selling
government bonds to Canadians. What would be the impact of this
action on the bond markets
Suppose that the U.S. government significantly increases its budget deficit and finances the resulting debt by selling government bonds to Canadians. What would be the impact of this action on the bond markets.
Suppose that the government reduces its fiscal deficit. The impact in the capital (loanable funds) market...
Suppose that the government reduces its fiscal deficit. The impact in the capital (loanable funds) market is to shift demand to the left reducing the interest rate; demand to the right reducing the interest rate demand to the left increasing the interest rate O demand to the right increasing the interest rate O none of the above
An equation that the deficits/surpluses in the three sectors of the economy (private, Government and foreign...
An equation that the deficits/surpluses in the three sectors of the economy (private, Government and foreign sectors) is as follows: (S-I)=(G-T)+(X-M) During 2012 Ireland had an external Current Account surplus of about 4.3% of GDP. During the same year, the fiscal deficit was 2.7% of GDP. Using this equation, please calculate the balance in the private sector. Comment on this situation
(25pts) 2. Suppose the government wants to reduce its budget deficit. Using the long-run model of...
(25pts) 2. Suppose the government wants to reduce its budget deficit. Using the long-run model of the economy developed in Chapter 3, illustrate graphically the impact of the alternative fiscal policy measures indicated in parts (a) and (b) below. Be sure to label: (i) the axes, (ii) the curves, (iii) the initial equilibrium values; (iv) the direction curves shift; and (v) the final equilibrium values. (15) a) Suppose the government decides to reduce the government's budget deficit by reducing government...
The options for the drop down bar are - decreases - returns to its initial value -increases 8. value: 6.00 points Use t...
The options for the drop down bar are
- decreases
- returns to its initial value
-increases
8. value: 6.00 points Use the AS-AD model below to answer the following questions. In each case, assume the economy starts in long- and short-run equilibrium. The Macroeconomy in long and short-run equilibrium LRAS SRAS Price Level (base = 100) Real GDP (Y) reset Suppose the spread of democracy around the world increases consumer confidence in Canada. a. Drag the appropriate line in...
4. Evaluating fiscal policy Aa Aa The graph below shows an economy's government expenditures (G) ...
4. Evaluating fiscal policy Aa Aa The graph below shows an economy's government expenditures (G) and tax revenues (T) at different levels of real GDP G AND T Billions of dollars) 280 T 2008 270 260 250 240 230 220 210 200 600 640 680 720 760 REAL 00P (Bitions of dollars) Hee Clear AL Suppose the economy's full-employment level of real GDP is $680 billion. In 2006, the economy was operating at its full-employment output level, so the standardized...
1. When the government increases spending by issuing more bonds, it causes: a) nations currency to...
1. When the government increases spending by issuing more bonds, it causes: a) nations currency to appreciate b)exports increase c)interest rates decrease d)demand for loanable funds decrease e)decreases merchandise trade deficit 2. When the Fed decreases money supply to combat inflation, it cuases: a)the price of the U.S. dollar to decrease b) capital to flow out of the US c)an increase in the merchandise trade deficit d)an increase in private spending e) a decrease in the interest rates 3. Which...
QUESTION 14 Which of the following statements is captured by the accounting identity, S+ (T-G)+CA? A...
QUESTION 14 Which of the following statements is captured by the accounting identity, S+ (T-G)+CA? A country with a low savings rate and a government budget deficit needs investment from other countries to supplement its domestic investment funds. A country with a high savings rate and a government surplus has additional funds available to invest in other countries A country that would like to increase its government budget deficit and domestic investment or increase private savings. reduce its current account...
a. Consider the hypothetical loanable funds market. The
government increases its spending (G) by $400 through deficit
financing. What is the effect of this event on household
consumption assuming that disposable income remains unchanged?
It will increase by $100.
It will increase by $200.
It will decrease by $100.
It will decrease by $200.
None of the above.
b. Now, same information like a, (The government increases its
spending (G) by $400 through deficit financing), if the Treasury
Secretary convinces...
Can anyone please help me about Venezuela in analysis of
fiscal policy: the venezuala government agency in charge of
this(.e.g Ministry of Finance/Department of Treasury), its recent
tax and government spending changes, the budget situation(
surplus/deficit), the importance of general government expenditure
in GDP.
And please draw AS AD diagram to illustrate the impacts of the
adjustment in its fiscal policy.
4 countries: Venezuela, South Africa, Turkey, Spain Version 2- Fiscal Policy For the specific country that you have chosen,...
Suppose that the U.S. government significantly increases its
budget deficit and finances the resulting debt by selling
government bonds to Canadians. What would be the impact of this
action on the bond markets
Suppose that the U.S. government significantly increases its budget deficit and finances the resulting debt by selling government bonds to Canadians. What would be the impact of this action on the bond markets.
Suppose that the government reduces its fiscal deficit. The impact in the capital (loanable funds) market is to shift demand to the left reducing the interest rate; demand to the right reducing the interest rate demand to the left increasing the interest rate O demand to the right increasing the interest rate O none of the above
(25pts) 2. Suppose the government wants to reduce its budget deficit. Using the long-run model of the economy developed in Chapter 3, illustrate graphically the impact of the alternative fiscal policy measures indicated in parts (a) and (b) below. Be sure to label: (i) the axes, (ii) the curves, (iii) the initial equilibrium values; (iv) the direction curves shift; and (v) the final equilibrium values. (15) a) Suppose the government decides to reduce the government's budget deficit by reducing government...
The options for the drop down bar are
- decreases
- returns to its initial value
-increases
8. value: 6.00 points Use the AS-AD model below to answer the following questions. In each case, assume the economy starts in long- and short-run equilibrium. The Macroeconomy in long and short-run equilibrium LRAS SRAS Price Level (base = 100) Real GDP (Y) reset Suppose the spread of democracy around the world increases consumer confidence in Canada. a. Drag the appropriate line in...
4. Evaluating fiscal policy Aa Aa The graph below shows an economy's government expenditures (G) and tax revenues (T) at different levels of real GDP G AND T Billions of dollars) 280 T 2008 270 260 250 240 230 220 210 200 600 640 680 720 760 REAL 00P (Bitions of dollars) Hee Clear AL Suppose the economy's full-employment level of real GDP is $680 billion. In 2006, the economy was operating at its full-employment output level, so the standardized...
QUESTION 14 Which of the following statements is captured by the accounting identity, S+ (T-G)+CA? A country with a low savings rate and a government budget deficit needs investment from other countries to supplement its domestic investment funds. A country with a high savings rate and a government surplus has additional funds available to invest in other countries A country that would like to increase its government budget deficit and domestic investment or increase private savings. reduce its current account...
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