Q: What is meant by fiscal policy? How far can it be used to ensure, a high level of employment?
A: In a market economy, decisions are taken by the market forces and the government has limited…
Q: Which fiscal policy would be the most contractionary? a $100 billion decrease in government spending…
A: The fiscal policy represents the use of government spending and taxation. To foster strong and…
Q: A contractionary fiscal policy shifts the aggregate demand curve leftward. true or false?
A: Fiscal Policy: It refers to the decision of the government regarding spending and taxation.…
Q: State any two objectives of fiscal policy?
A: According to the given question Gradually we can say that fiscal policy always leads to the…
Q: fiscal policy
A: The fiscal policy (FP) is a tool in hand of government to regulate and control the economic…
Q: olicy"
A: Resource mobilization is the process of receiving resources from the resource provider with use of…
Q: how to reduce the debt gdp ratio for macro
A: The debt-to-GDP proportion is the measurement contrasting a country's public debt with its (GDP).
Q: fiscal policy
A: There are two policies which go hand in hand to regulate or stimulate the economy. The monetary…
Q: Will a discretionary fiscal policy action that involves spending $100 billion have the same overall…
A: The discretionary fiscal policy refers to changes in the tax rate or the level of government…
Q: Calculate fiscal deficit when Borrowings is $15,000 and the interest is $600
A: # Fiscal deficit is the difference between total expenditure and total receipts or spending of the…
Q: Define what is 'automatic stabiliser' in fiscal policy, and provide 2 examples
A: Meaning of Fiscal Policy: The term fiscal policy refers to the situation under which the…
Q: How will a contractionary fiscal policy affect a budget deficit? A.) Debts will…
A: Budget deficit refers to the amount of expenditure of a government that surpasses/exceeds the total…
Q: Which of the following is an example of contractionary fiscal policy? A. Cutting spending B.…
A: Fiscal policies are managed/controlled by the government of the country whereas monetary policies…
Q: What are the three fiscal policy tools and how would each be used to counter a contractionary gap?
A: Fiscal policy tools are the revenue and expenditure tools of the government undertaken to accomplish…
Q: If the economy is producing in the intermediate zone of the ad/as would you suggest discretionary or…
A: The government of the country takes the help of fiscal policy measures to maintain balance in the…
Q: Real GDP Which fiscal policy action MIGHT the government take to move the economy from Point A to…
A: Fiscal policy is the policy in which government either change his spending or change tax levels for…
Q: DYNAMIC TAX SCORING—WHAT IS IT, AND WHO WANTS IT? Go to www.google.com and search for information on…
A: Dynamic scoring is an apparatus to give individuals from Congress the data they have to assess the…
Q: f an increase in government spending is accompanied by a reduction in spending by firms and…
A: The GDP or the gross domestic product is defined as the value of all final goods and services newly…
Q: A government increases the corporate tax rate from 15 to 17% in an economic recession. Fiscal policy…
A: Fiscal policy can be of two types, procyclical and anticyclical.
Q: T F Fiscal policy determines the level of interestrates.
A: Fiscal policy refers to the taxation and expenditure decisions of the government that influences a…
Q: Which kind of economic fiscal policy measures do you recommend at the current economic situation…
A: Stagflation is defined as a period of poor economic development and relatively high unemployment—or…
Q: How fiscal policy influences aggregate demand?
A: Aggregate demand refers to the overall demand for commodities and services in an economy during a…
Q: What is fiscal imbalance? Fiscal imbalance is the _______ value of the government's commitments…
A: What is the fiscal imbalance? Fiscal imbalance refers to a situation where all of the government's…
Q: What will be the primary deficit if the fiscal deficit is 320 and the interest payment by the…
A: The variable that captures the borrowing requirements of the government other than the obligation…
Q: Which of the following would be classed as an expansionary fiscal policy? An increase in the money…
A: An expansionary fiscal policy is a policy from government to expand aggregate demand without any…
Q: What do you understand by the term Fiscal Policy?
A: Fiscal policy is a way through which the US government adjusts its Expenses and tax rate depend on…
Q: What is the difference between expansionary and contractionary fiscal policy and what effects does…
A: Fiscal Policy: Fiscal policy is a part of an economic policy that is monitor by the government of…
Q: Should the government fight recessions with spending hikes rather than tax cuts ? Explain
A: Government spending and tax reductions have different multiplying effects on the economy.
Q: model of an economy with the following equa Yd he fiscal policy multiplier with respect to incon
A: *Answer:
Q: 01. Which ff the following reasons why fine-tuning the economy is not likely to be successful, is…
A: In an economy, there are different types of economic lags that may arise when government tries to…
Q: What is fiscal multiplier?
A: Formula for fiscal Multiplier is Fiscal Multiplier=11-MPC where MPC is marginal propensity to…
Q: Identify the effects of fiscal policy on the economy
A: Fiscal policy refers to the government policy that stabilizes th economy through bring changes in…
Q: The U.S. is in a recession due to decreased Aggregate Demand in the economy. Should the government…
A: When there is a financial crisis in the economy or a rise in interest rates, fall in the prices of…
Q: How can fiscal policy eliminate GDP gap
A: Fiscal policy refers to how the government uses spending and tax policies to influence economic…
Q: Show effect of expansionary fiscal policy in the short run and medium run. AS AD model using ISLM…
A: The aggregate demand is the downward sloping curve which sows the aggregate demand for all the goods…
Q: What is macro stability and resource mobilization in fiscal policy?
A: In an economy, fiscal policy implies the action of the government to influence the aggregate demand…
Q: Country D experiences a recession due to a decrease in consumer confidence. There are two…
A: Decline in consumers confidence results in decline in demand for consumer goods, thus there would be…
Q: What is the main reason for employing expansionary fiscal policy during a recession?
A: Fiscal policy is an instrument used by the government and the central bank to look on to the…
Q: Identify one fiscal policy action that could counter the increase in investments. Explain how this…
A: Fiscal policies are actions taken by the government to stabilize the economy. The policies include…
Q: Since 1969, the U.S. federal government had a budget surplus On the late 1980s Oin the late 1970s…
A: The budget surplus of the government is the situation when the income earned is greater than its…
Q: Fiscal policy includes all of the following, except: O Borrowing Transfer payments (TP) wages…
A: Fiscal policy refers to the economic policy that is implemented by the government of a country to…
Q: Suppose a government has a tax revenue shortfall. Will hyperinflation inevitably follow unless the…
A: Hyperinflation is a term used to define a nation's economic abrupt, disproportionate, and…
Q: Expansionary fiscal policy increases the government budget deficit. True, False, or Uncertain?…
A: Fiscal policies are the policies that are managed by the government with the aim of influencing…
Q: To combat inflation, the federal government could apply which fiscal policy? decrease government…
A: Fiscal policy refers to changes in government spending and taxes.Monetary policy refers to changes…
Q: 14 MULTIPLE SELECT: If the government decides to pursue a expansionary policy, which of the…
A: An expansionary fiscal policy aims to increase the Aggregate demand by decreasing taxes and…
Q: which of the following individuals would most likely favor an increase in government spending, as…
A: a and d would be opposed to tax cut.
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- Imagine that the economy of Germany finds itself in the following situation: the government budget has a surplus of 1 of Germanys GDP; private savings is 20 of GDP; and physical investment is 18 of GDP. Based on the national saving and investment identity, what is the current account balance? If the government budget surplus falls to zero, how will this affect the current account balance?Imagine that the U.S. economy finds itself in the following situation: a government budget deficit of 100 billion, total domestic savings of 1,500 billion, and total domestic physical capital investment of 1,600 billion. According to the national saving and Investment Identity, what will be the current account balance? What will be the current account balance if Investment rises by 50 billion, while the budget deficit and national savings remain the same?Explain the relationship between a current account deficit or surplus and the flow of funds.
- Suppose a country was facing the problem of budget deficit and by reducing government expenditures the government has achieved the target of balanced budget. With the help of appropriate diagrams explain how a country’s shift from budget deficit to balanced budget would affect its investments, economic growth, net capital outflow and currency exchange rate?urgent Consider an OPEN ECONOMY with a floating exchange rate regime. In the aftermath of recent elections won by the country’s socialist party, consumer confidence and consumption has increased dramatically. Within the IS-MP framework for an open economy, explain and illustrate graphically what the effect is of the increase in overall consumption on equilibrium output, the real interest rate, net cash outflow, the trade balance and the country’s real exchange rate.6. In a small open economy undertaking a fiscal contraction, the real interest rate should: rise fall stay the same move by the same amount as the exchange rate
- a Figure 1 shows the exogenous world interest rate (r*) determines the level of investment (I) and the difference between saving (S) and investment determines net capital outflow and net exports (NX) for a small open economy. What would happen to I, NX and S if: i. The government of this small open economy uses expansionary fiscal policy. ii. The government of other countries (abroad) uses contractionary fiscal policy. b Suppose the price of a cup of tea is Rs.50 in Pakistan and $2 in USA, the value of nominal exchange rate is $0.006364 per PKR. Calculate the value of real exchange rate (ε) and interprete its meaning. Also, discuss the relationship between net exports (NX) and real exchange rate. c Briefly explain the theory of purchasing power parity (PPP) with the help of example.1. When calculating gross national disposable income in an open economy, we adjust gross nationalexpenditure by:a. subtracting exports and adding back imports.b. adding in net income earned from foreign sources, plus the trade balance, plus net unilateraltransfers from abroad.c. subtracting depreciation, payroll taxes, and indirect business taxes, while adding in subsidies.d. taking out net factor income from abroad and subtracting net unilateral transfers.. The government has proposed Rs1,289 billion for the defence budget for the year 2020-21, 5.1% more compared to last year’s revised defence estimates of Rs1,227 billion for the year 2019-20. If Government cut defence Budget, what happens to saving, investment, the trade balance, the interest rate, inflation rate and the exchange rate? And similarly, Government decreases the interest rate due to COVID-19 so explain what impact on consumption, investment and interest rate. Justify the answer with your own word and examples.
- Assume that the gross domestic product is $6,000, personal disposal income is $5,100, thegovernment deficit is $200, consumption is $3,800, and the trade deficit is $100. What is the sizeof: d. National Savingse. Taxesf. Public savingsTurkey has run a trade deficit for almost every year during the past few decades. Which of the following is the main factor leading to this situation? a.The Turkish lira is overvalued against foreign currencies. b.International demand for Turkish goods and services is low. c.Domestic demand for foreign goods and services is high. d.National saving in Turkey is low relative to domestic investment.You have the following annual data for the New Zealand economy ($bn): GDP (Y) = 190 Gross National Disposable Income (Yd) = 183 Net exports of goods and services (NX) = 5 Private Consumption (C) = 112 Government consumption (G) = 38 Based on this data, complete the following paragraph (enter numbers only). Investment (I) is equal to $____bn. The current account (surplus or deficit?) is equal to $_____bn. The capital account part of the balance of payments (which for the purposes of this question includes both capital and financial accounts) therefore shows a ____ of $_____bn. National savings is equal to $______bn.
