ZuoTi.Pro
Question

Answer the question on the basis of the following sequence of events involving fiscal policy: (1) The composite index of...

Answer the question on the basis of the following sequence of events involving fiscal policy: (1) The composite index of leading indicators turns downward for three consecutive months, suggesting the possibility of a recession. (2) Economists reach agreement that the economy is moving into a recession. (3) A tax cut is proposed in Congress. (4) The tax cut is passed by Congress and signed by the president. (5) Consumption spending begins to rise, aggregate demand increases, and the economy begins to recover. The recognition lag of fiscal policy is reflected in events

4 and 5.

2 and 3.

3 and 4.

1 and 2.

business   economics   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Recognition lag in fiscal policy is the time taken by the authorities to recognize that there is a need for fiscal policy action.

This can be shown in the event 2 and 3. Because in event 2 they accepted that the economy is moving into the recession and in the event 3, they decided to take fiscal policy action to solve it.

0 0
Add a comment
Know the answer?
Add Answer to:
Answer the question on the basis of the following sequence of events involving fiscal policy: (1) The composite index of...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • Question 43 (Mandatory) (1 point) Answer the question on the basis of the following sequence of...

    Question 43 (Mandatory) (1 point) Answer the question on the basis of the following sequence of events involving fiscal policy: (1) The composite index of leading indicators turns downward for three consecutive months, suggesting the possibility of a recession. (2) Economists reach agreement that the economy is moving into a recession. (3) A tax cut is proposed in Congress. (4) The tax cut is passed by Congress and signed by the president. (5) Consumption spending begins to rise, aggregate demand...

  • 7. Fiscal policy - Criticisms and complications Complete the following table by indicating whether each scenario...

    7. Fiscal policy - Criticisms and complications Complete the following table by indicating whether each scenario is an example of a recognition lag, implementation lag, or impact lag. Recognition Lag Implementation Lag Scenario Impact Lag The economy enters a deep recession, and Parliament passes spending bills for public works projects that will take years to plan and build. The economy enters a deep recession during a period in which quarterly data are showing positive economic growth. The economy enters a...

  • (1) Which of the following is not a tool of fiscal policy? Government spending Taxes Tax...

    (1) Which of the following is not a tool of fiscal policy? Government spending Taxes Tax incentives Private investment          (2) Which of the following statements helps to explain why the economy can be slow to recover from a recession? Workers are less motivated because of reduced expectations, which reduces total output. There is not as much money in circulation to fuel new investment. Wages do not fall quickly, which delays an adjustment to a higher output level....

  • QUESTION 1 Which of the following is an example of an automatic fiscal policy stabilizer? a....

    QUESTION 1 Which of the following is an example of an automatic fiscal policy stabilizer? a. Tax revenues fall as real GDP decreases. b. Congress decides to cut spending on national defense. c. Congress cuts individual income tax rates. d. Tax revenues rise after Congress raises corporate tax rates. QUESTION 7 When a country's economy is producing at a level that is less than its potential GDP, the standardized employment deficit will show a ________ than the actual deficit. a....

  • 1) Suppose that the national economy is experiencing a recession with an estimated recessionary gap of...

    1) Suppose that the national economy is experiencing a recession with an estimated recessionary gap of $10 billion. Congress is considering the use of fiscal policy to ease the recession, and due to current political sentiments, it has determined that the maximum spending increase the government is willing to support is $3 billion. The government wants to make up the remainder of the recessionary gap using tax cuts. If a spending increase of $3 billion is approved and the MPC...

  • 1. When countries have severe debt problems: fiscal policy is an especially good idea. expansionary fiscal...

    1. When countries have severe debt problems: fiscal policy is an especially good idea. expansionary fiscal policy can reduce real growth. it makes no difference for fiscal policy. they can continue to borrow forever without any adverse consequences. 2. Increases in government spending financed through additional borrowing will typically: lead to higher taxes. lead to higher interest rates. stimulate both consumption and investment. provide more stimulus than when government spending is financed through higher taxes. 3. In a recession, automatic...

  • 1. To stimulate economic activity during a severe recession, the strongest appropriate fiscal policy is: a....

    1. To stimulate economic activity during a severe recession, the strongest appropriate fiscal policy is: a. an increase in taxes and/or an increase in government spending b. an increase in taxes and/or a decrease in government spending c. a decrease in taxes and/or an increase in government spending d. a decrease in taxes and/or a decrease in government spending e. a decrease in government purchases and/or a decrease in transfer payments 2. An increase in income tax rates: a. makes...

  • Classify each of the following as discretionary or automatic fiscal policy (or neither) 1. (4 pts)...

    Classify each of the following as discretionary or automatic fiscal policy (or neither) 1. (4 pts) A decrease in tax receipts in a recession 2. (4 pts) Additional expenditure to upgrade highways 3. (4 pts) An increase in the public education budget 1 4. (4 pts) A purchase of $10 Million to treat AIDS sufferers in a foreign country. 5. (4 pts) A cut in funding for national defense during an expansion

  • Classify each of the following as discretionary or automatic fiscal policy (or neither) 1. (4 pts)...

    Classify each of the following as discretionary or automatic fiscal policy (or neither) 1. (4 pts) A decrease in tax receipts in a recession 2. (4 pts) Additional expenditure to upgrade highways 3. (4 pts) An increase in the public education budget 4. (4 pts) A purchase of $10 Million to treat AIDS sufferers in a foreign country. 5. (4 pts) A cut in funding for national defense during an expansion esi

  • Question 1 Fiscal policy will have its greatest impact if monetary policy is __________. contractionary expansionary...

    Question 1 Fiscal policy will have its greatest impact if monetary policy is __________. contractionary expansionary accommodating opposing 3. When aggregate demand increases, firms with market power—like Walmart—are MOST likely to raise __________. prices output wages sales tax Question 4 The money supply fell during the Great Depression because __________. the monetary base also fell the public held less currency, and the banks held less excess reserves the public held more currency, and the banks held more excess reserves the...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT