Consumers increased consumption by a relatively small amount in 2008 and 2009 because they believed the tax cuts were temporary. True or False
Q: C = 1,600 + 0.8(Y – T) I = 1000 G = 1,800…
A: C = 1,600 + 0.8(Y – T) I = 1000 G = 1,800 X = M = 0 T = 3,000 + 0.01Y
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A: Automatic stabilizers are part of the government budget that offsets fluctuations in aggregate…
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A: The answer is - c. Supply-side tax cuts are likely to widen income inequality.
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A: Reagan's economic policies were formed focusing on tax cuts, declines social expenditures and…
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A: Expansionary fiscal policy refers to the policy use of the government budget to affect the overall…
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A: Answer to the question is as follows :
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A:
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A:
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A: In the market, when the government wants to implement fiscal policy, it can either impose…
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A: The tool that government use in order to balance the economy is called fiscal policy tool.
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Q: If AD=$1,500, AS=$2,500, Consumer borrowing =$500, find the level of the budget deficit so that…
A:
Q: Which of the following is not an automatic stabilizer? A. Unemployment compensation. B.…
A: Answer: Correct option: (B) Defense spending. Explanation: Automatic stabilizers are the components…
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A: Fiscal policies are actions taken by the government to stabilize the economy. The policies include…
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A: Federal government can increase or decrease taxes and government spending to change the money supply…
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A: Here, given information is: C=R450m + 0.75YD I=R268m G=R150m And, this economy has balanced budget…
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- Why will a temporary tax increase be insignificant in reducing consumption expenditures by the amount expectedA fall in mps raises the GDP multiplier. O True O FalseEqual increases in government purchases and in net taxes have equal but opposite effects on the level of real GDP demanded. a. True b. False
- Why will a temporary tax increase be insignificant in reducing consumption expenditures by the amount expected a) Because people viewed the tax increase as permanent. b) Because people chose to increase their saving. c) Because people viewed the tax increase as temporary. d) consumption expenditures are not related to the level of taxation.Consumer saves 15% of additional income, spends 65% of income on goods and services and spends 20% on imports. What is the tax multiplier?How do income taxes and taxes on consumption expenditure influence the tax wedge? An increase in income taxes _______ the tax wedge, and an increase in taxes on consumption expenditure _______ the tax wedge. A. increases; increases B. increases; does not change C. decreases; decreases D. does not change; increases
- can you tell me which questions i've gotten wrong? This is a practice quiz that doesnt tell you the correct answers at the end. thanks 1- An increase in business investment spending has the same effect on the level of ad as an increase in the same amount of government spending. -true 2- If the government increased taxes by $10 at the same time it increased spending by $10 there would be no effect on the level of AD. 3- If social security payments to retirees increase, AD will increase and raise Y*. -true 4- Tax cuts in the classical range of the AS will stimulate output and unemployment -false 5- Increasing welfare payments by borrowing money to do so will increase AD- true 6- if the mpc increases, the multiplier decreases- false 7- if the mps increases the multiplier decreases -true 8- part of the cost of growing government budget deficits is and “opportunity cost” of what else could have been done with the money, particularly if the borrowing is used to increase consumption spending.…True or False : A recessionary gap can be caused by consumers who spend more than the earn. True FalseThe marginal propensity to consume (MPC) for this econamy is . and the spending multiplier for this economy is Suppose the govemment in this economy decides to decrease govemment purchases by $250 bilion. The decrease in government purchases will lead to a decrease in income, generating an initial change in consumption equal to second change in consumption equal to This decreases income yet again, causing a The total change in demand resulting from the initial change in government spending is The following graph shows the aggregate demand curve (AD ) for this economy before the change in govemment spending. Use the green line (trangie symbol) to plot the new aggregate demand curve (AD:) after the multiplier effect takes place. For simplioity, assume that there is no "crowding out." Hint: Be sure that the new aggregate demand curve (AD) is paralel to the initial aggregate demand curve (AD). You can see the slope of AD by selecting t on the graph. 540 AD. AD, 130 100 OUTPUT (Tions of…
- O Macmillan Learning The graph shows the income-expenditure model for the country of Desireland, where AE represents aggregate expenditure. The Desirish government wants to stimulate the economy owing to a slowdown in economic activity and, as such, decides to increase infrastructure spending by $7.65 billion. Show the impact of this extra spending given a marginal propensity to consume (MPC) of 0.7 and a total tax take of 30%, for any changes in GDP. In this example, assume that there is no international trade or inflation, and that interest rates are fixed. Planned aggregate spending (in billions of dollars) 70 65 60 55 50 45 40 35 30 25 20 15 10 5 0 0 01- 5 10 15 20 25 30 35 40 45 50 Real GDP (in billions of dollars) 45 degree line A new socialist government is elected to Desireland and decides to increase direct spending even more, to total of $9.7 billion. What will be the total change in real GDP? Please provide the answer to the nearest whole billion. Planned AE 55 60 65 70…Our economics have redone their calculations. They now estimate that citizensin our country have an MPC of 0.60. We can fix the problem by decreasing GDP by 250. How much should we increase taxes?Consider a hypothetical economy in which the marginal propensity to consume (MPC) is 0.8. The following graph shows the aggregate demand curves (AD₁ and AD₂), the short-run aggregate supply curve (SRAS), and the long-run aggregate supply curve (LRAS). The economy is currently at point A. PRICE LEVEL 140 136 132 128 124 120 116 112 108 200 300 LRASSEE MORE QUESTIONS
