10.2 In which of the following circumstances is expansionary fiscal policy more likely to lead to a short-run increase in investment?Explain. a)When the investment accelarator is large or when it is small? 11.1 Explain how each of the following developments would effect the supply of money,the demand for maoney, and the interest rate.Illustrate your answers with diagrams. e)A wave of optimism boosts business investment and exapands aggregate demand.

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A: Contractionary fiscal policy is defined as a decrease in government spending and an increase in…

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Q: effectiveness

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Q: ) In case of DEFLATION, mention that which particular type of fiscal policy will be used and why and…

A: Deflation: Deflation refers to a situation of overall contraction in economic activities or in other…

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A: Answer; Multiplier = 1/(1 - MPC) = 1/(1-0.5) = 2

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A: Answer: Given, MPC=0.75 (a). The formula for the increase in aggregate demand is given below: Change…

Q: If the marginal propensity to consume is 0.2 and the government increases its spending by ¥1…

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Q: Exercise 4 Use a combination of text and drawing of figures when answering the following questions:…

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A: When the MPC (marginal propensity to consume is 4/5, the multiplier is calculated as follows:

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A: the aggregate demand is the total  number of goods and services svgjslly form crowd out.

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A: Government spending has to be increased by $5 billion.

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Q: Refer to Figure 10-1. If the economy is below full-employment real GDP, what will the new long-run…

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Q: Given MPC (marginal propensity to consume) = 0.75, if the government implements an expansionary…

A: MPC = 0.75 Tax multiplier = (-MPC/1-MPC) = (-0.75/1-0.75)= (-0.75/0.25)= -3.

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Q: Question 22 When is fiscal policy more effective at stimulating real GDP? When the marginal…

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Q: In which of the following circumstances is expansionary fiscal policy more likely to lead to a…

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A:

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Q: n each of the following cases, calculate the spending multiplier and determine the size and shift of…

A: Since you have posted a question with multiple sub-parts, we will solve first three subparts for…