Based on the Adaptive Expectations Theory, advice the Cabinet Secretary for Treasury and Planning, on the possibilities of financing the fiscal gap using debt to increase aggregate demand and spur economic growth that would create job opportunities for the country.
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- Which statement below is true of ONLY fiscal policy? Uses government expenditures to create demand Increases the availability of money Used to alter AD A policy typically set by a banking authority. Choose correctly option explanation. But not copy paste from anywhere.Analyze fiscal policy in order the generate macroeconomic stability.The rational expectations theory suggests that as the public learns more about the effects of fiscal and monetary policy, in the pursuit of their own self interest they take actions that make Group of answer choices monetary policy more powerful than fiscal policy. fiscal policy more powerful than monetary policy. fiscal and monetary policy ineffective in achieving their stated aims. fiscal and monetary policy effective in achieving their stated aims.
- According to the traditional Keynesian analysis, if the government increases spending and pays for all of it by raising current taxes, then a budget deficit will occur. a budget surplus will occur. aggregate demand will decrease. aggregate demand will increase.In each of the following cases, determine whether the policy is an expansionary or contractionary fiscal policy a) The number of weeks an unemployed person is eligible for unemployment benefit is increasedb) The tax on gasoline has increased. Don,t copy from anywhere. Answer must br correct. Do all answer step by step.If stability of the economy is the primary objective of Fiscal Policy, then an Annually Balanced Budget (Government Expenditures = Tax Revenues) is the best policy approach. True or False?
- The government will have _____ flexibility in implementing countercyclical fiscal policy when the outstanding stock of government debt is _____ relative to the size of GDP. a.More; large. b.More; small. c.Less; insignificant. d.Total; large. e.Less; small. Consider an economy initially in a long-run equilibrium. A positive AS shock will _____ the price level and _____ output in the short run. In the long run, the price level will _____ and output _____. a.Increase; increase; return to its initial level; will be restored to potential output. b.Increase; increase; decrease; will be restored to potential output. c.Decrease; increase; return to its initial level; will be restored to potential output. d.Decrease; increase; decrease further; will be restored to potential output. e.Decrease; decrease; decrease further; will decrease further.Supply-side economists: saw influence beyond in both the Bush and Clinton administrations. disagreed with economist Arthur Laffer's views on taxes. were influential in President Reagan's decision to change the tax structure. believe that government regulations do not reduce productivity and undermine industrial efficiency."Fine-tuning" the economy is not possible for the United States and generally large economies governed by a democratic political system because... a) Often it takes economists up to 6 months to determine with confidence that the economy changed its trajectory towards recession or expansion. This is the "recognition lag." b) The policies of the Federal Reserve must be approved by Congress which takes a long time. c) It takes the political system (Congress and the President) several months and sometimes years to agree on specific fiscal policies to change the economy's direction. This is the "policy lag." d) It may take considerable time to implement fiscal policy, especially if the policy involves significant new spending programs, as takes many months to set up new administration, policies, procedures and hire the requisite administrators. This is the "implementation or administrative lag." e) The policies passed by Congress must be approved by the Supreme Court. f) Fiscal policy…
- Which of the following would be a fiscal policy prescription for ending inflation? A) Raise taxes B) Increase government expenditures to let the multiplier work C) Raise interest rates to stimulate saving D) Promote exports to increase injections in the domestic economyWhen there is a problem of a delay in terms of implementation of the fiscal policy, that would be categorized as _____. execution lag information lag decision lag Fiscal policy nowadays are focused on eliminating GDP gap True False When the Central Bank controls the money supply by controlling the amount of high-powered money in the economy, that is called _____. interest rate fixation selective credit control open market operations required reserves ratio policy The focus of monetary policy nowadays is by using interest rate as an indicator. True FalseLabel each of the following scenarios in which there are problems enacting and applying fiscal policy as being an example of either recognition lag, administrative lag, or operational lag. To fight a recession, Congress has passed a bill to increase infrastructure spending but the legally required environmental impact statement for each new project will take at least two years to complete before any building can begin. Distracted by a war that is going badly, politicians take no notice until inflation reaches 8 percent. A sudden recession is recognized by politicians, but it takes many months of political deal making before a stimulus bill is finally approved. To fight a recession, the president orders federal agencies to get rid of petty regulations that burden private businesses – but the federal agencies begin by spending a year developing a set of regulations on how to remove petty regulations.