If the economy is in a recessionary period how, specifically, might the government use their three tools?  three tools change the tax rate  change the level of govertment spending change transfer payments

Q: If the government wants to expand aggregatedemand, it can _________ government purchases or_________…

A: Option ‘b’ is correct Option ‘b’- The Aggregate demand can expand when the government purchases…

Q: Which fiscal measure should be adopted in correcting inflationary Gap? (A) Reduction in Public…

A: The inflationary gap is the measurement of the gap between the current level of the Gross domestic…

Q: arginal Propensity to Consume: 0.4, Investment: 10000, Government Spending: 30000 et Exports: 5000,…

A: (a). Consumption function is C = bar(C) + c(Y - T) bar(C) = Autonomous consumption = 9000 c =…

Q: Discussion 4 Discuss the "FISCAL POLICY: A KEYNESIAN PERSPECTIVE" was John Maynard Keynes Right?…

A: According to keynes,fiscal policy was very important for government.It needs to be initiated…

Q: Analyze fiscal policy in order the generate macroeconomic stability. Which kind of economic measures…

A: Introduction The Govt budget, and the nation's reducing poverty efforts, should be funded in a…

Q: When the government increases spending (expansionary fiscal policy), inflation and employment are…

A: Fiscal policy refers to the policy that is implemented by the government through tax rates and…

Q: SRAS AD SRAS LRAS AD REAL GDP v in real GDP. Under the supply-side view, a decrease in marginal tax…

A: Answer: Graphical presentation: Due to a decrease in the marginal tax rate, there is a greater…

Q: Real Income (Y) Real GDP Potential GDP T1 T2 T3 T4 T5 Years (a) Based on the given business cycle…

A: Economic recession refers to a fall in the economic activity in an economy. This lower economic…

Q: An economy is experiencing a high rate of inflation. The government wants to reduce GDP by $80…

A: Tax multiplier = mpc/ 1- mpc

Q: Suppose equilibrium GDP is less than full-employment output and the economy is in a recession. What…

A: Fiscal policy is used by government to make the economy going normal without any fluctuations. The…

Q: An economist who believes the economy is self-regulating is more likely to advocate laissez-faire…

A: There are two schools of thought- (a) Classical School of Thought and (b) Keynesian School of…

Q: If someone passes 1 trillion  Infrastructure Bill,Graphical show the projected effect of this policy…

A: IS-MP model: It refers to a model under which the interest rate and output will be determined in the…

Q: suppoose  the MPC is 0.9 aand  the MPI is  0.1.If government expenditure go up $100 billion while…

A: Given, MPC = 0.9 ; MPI = 0.1, government expenditure increases by $100 billion, taxes falls by $100…

Q: Which of the following is used as a remedial measure during a recession in an economy? a. Decrease…

A: A recession refers to a period of economic slowdown. The recession is characterized by low levels of…

Q: If the primary goal is to reduce inflation, which of the following fiscal policy actions would be…

A: Fiscal policy refers to change in government expenditure and revenue(taxes) in order to achieve…

Q: If taxes (T) increase, total expenditures decrease. In what direction does the demand curve shift?…

A: Aggregate demand (AD) is the sum total amount of commodities and services demanded in an economy at…

Q: Price level LRAS SRAS, SRAS, AD, AD2 Real GDP Image Copyright Protected @ 69857AEREIU HJOP6587…

A:

Q: n the AS/AD model of the economy, fiscal policy aims to shift which curve?

A: Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: a) Why can't the government run a budget deficit in a one- period macroeconomic model? b) Why are…

A: Budget refers to the legal document of the government which accounts for the revenue of the…

Q: Fiscal policymakers are faced with a $6 trillion dollar inflationary gap and are worried about…

A: Inflationary gap = $6 trillion  MPC = 0.9 Change in tax = 0.5 trillion

Q: Using the aggregate expenditures model, answer the questions below to show how government fiscal…

A: Full employment level refers to the total output produced by the economy with the given amount of…

Q: The outbreak of COVID-19 pandemic in 2020-21 has had a significant impact on the Australian economy.…

A: Aggregate demand (AD) is the sum total amount of commodities and services demanded in an economy at…

Q: Choose the correct answer: .Taxes are reduced by $50 billion and income increases by $1,000…

A: Tax multiplier indicates impact of change in taxes on the entire income of the economy. In…

Q: y'-t y-t C If taxes today (t) are lowered, and taxes tomorrow (t') are increased, what happens to…

A: If we see intuitively then we know for sure than when taxes increases then the Consmption falls and…

Q: What are the effects of the business cycle on the government's budget? automatically tax revenues…

A: The government spending plan, also known as the national budget, is a file that lists the various…

Q: Cite the five major demand-side components of GDP. Then, identify the major elements affected by…

A: Gross domestic product of a country is the market value of all final commodities and services that…

Q: If the government cut expenditures during an expansion O A. it would have to raise the tax rate B.…

A: Expansion is the situation in which the government is trying to stimulate the market by increasing…

Q: If consumption is C=100+0.75Yd Taxes is T=50+0.5Y Export is X=200 Import is M=50+0.25Y…

A: Given consumption is C=100+0.75Yd Taxes is T=50+0.5Y Export is X=200 Import is M=50+0.25Y Government…

Q: assume the following economy autonomous consumption =£3m marginal propensity to consume= 0.8…

A: Given  autonomous consumption(Ca)  =£3m marginal propensity to consume(c) = 0.8 business…

Q: nternational Macroeconomics Y = C+I+G, where C=30+0.5*Y, I=100-10*r M=500-10*r+0.1*Y (Y and r are…

A: The fiscal multiplier is a Keynesian concept first presented by John Maynard Keynes's student…

Q: Government expenditures, G. and tax revenues, T Refer to the figure Deficit GDP, Real a. The…

A: The entire monetary worth of all the goods and services produced within the geographic limits of a…

Q: • S = -1250 + 0.4 Y, I= 750 – 1600i • Ms= 1100, Mt = 0.15Y and Mp = 0.10 Y • A. Calculate Y eq, S,…

A: Consumption expenditure refers to the amount of money consumers spend on goods and services, and…

Q: or I fall more?

A: A recession refers to a significant decline in general level of economic activity being in a…

Q: 1. a. You are studying an economy with an income tax rate, t1, of 32% and an MPS of 0.3. It is…

A: Answer: Given: Income tax rate = 32% = 0.32 MPS (marginal propensity to save) = 0.3 MPC (marginal…

Q: Assume that the economy experiences very high increasing energy prices. 1. Explain about what…

A: Price: It refers to the rates at which goods and services are available in the economy. The more the…

Q: Assume thát marginal propensity is equal to 0.75. HOw total income would react in response to change…

A: The marginal propensity to consume (MPC) basically refers to a statistic that quantifies induced…

Q: mployment GDP is $9000 billion, and the MPC = 75, what is the appropriate fiscal policy to return ne…

A: An economy is said to be at its equilibrium level of income when aggregate supply and aggregate…

Q: Fiscal policy is when changes are made to and to accomplish macroeconomic goals. Select an answer…

A: Fiscal Policy:- The use of government tax and expenditure measures to impact economic circumstances…

Q: Which of the following is an example of contractionary fiscal policy? Select an answer and submit.…

A: Fiscal policy is used by government to stabilize the economy either in terms of price or output.

Q: Automatic stabilizers are increases in spending and reductions in taxes that__ ?which one? a.Are…

A: According to Keynesian macroeconomics, the change in aggregate demand is able to affect the output…

Q: 14. If government spending same amount, how much must they change to eliminate the recessionary gap?…

A: Potential GDP > Real GDP, so there is a recessionary gap which can be closed by increasing G or…

Q: An economy is experiencing a high rate of inflation. The government wants to reduce consumption by…

A: C= a+ bYd C = a +b(Y-T) Differentiating C with respect to T

Q: Which do you believe is the better macroeconomic policy to use for stabilizing (achieving potential…

A: A MP is a policy implemented by the Central Bank(CB) or the government of the company to control the…

Q: Can you indicate 2 built in stabilizers and show they function during a recession and expansion.

A: Two automatic stabilizers in recession are:  Automatic stabilizers are mechanisms incorporated into…

Q: Fiscal policCy is purposet movements in designed to direct an economy.

A: Fiscal policy is a policy that the government uses to influence the economy. It aims at certain…

Q: Examples of contractionary policy to help with an inflationary gap would be: (Select All that…

A: Inflationary gap occurs when aggregate demand exceeds the output level. The output is not sufficient…