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The government wants to achieve a balanced budget. It therefore increases spending by $10 million and increases taxes by $10 million. The MPC equals .80. By how much will
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- If MPC = 0.5, a simultaneous increase in both taxes and government spending of $20 will a. decrease GDP by $20 b. increase GDP by $20 c. decrease GDP by $40 d. increase GDP by $40Suppose that the government decreases its autonomous spending by $100 billion and also decreases its autonomous taxes by $100 billion. How would this affect the economy? Question 8 options: No effect on the level of GDP GDP may rise or fall depending on the size of the mpc GDP will rise GDP will fallDoes a balanced budget multiplier of one suggests that the government can stimulate economic growth without changing the size of the budget deficit or surplus?
- To maintain a balanced budget during a recession, what should the government do? Group of answer choices Decrease taxes, increase transfer payments, and/or decrease government spending Increase taxes, increase spending, and/or increase transfer payments Increase taxes, decrease transfer payments, and/or decrease government spending. Decrease taxes, decrease government spending, and/or decrease transfer paymentsIf income tax rates are increased in an attempt to balance the federal budget, we should expect to see a. a decrease in consumption and a decrease in GDP. b. a decrease in consumption and an increase in GDP. c. an increase in consumption and an increase in GDP. d. an increase in consumption and a decrease in GDP.If the federal government lowers business and personal tax rates we would expect a interest rates to rise B potential GDP to fall C fiscal policy to increase D consumer and investment spending to increase
- At the end of 2019, a country's national debt was $ 200 billion. In 2020, the government spent $ 120 billion and ended the year with a debt of $ 230 billion. How much did the government receive in tax revenues in 2020? The government received $ _____ billion in tax revenues in 2020.If MPC = .5, a simultaneous increase in both taxes and worthless government spending of $20 will: decrease GDP by $20. decrease GDP by $40. increase GDP by $20. increase GDP by $40. Increase GDP by $60.(Fiscal Policy) Chapter 11 shows that increased government purchases, with taxes held constant, can eliminate a recessionary gap. How could a tax cut achieve the same result?
- An example of a fiscal policy designed to increase real GDP is a. a cut in taxes. b. an increase in taxes. c. a decrease in government expenditure. d. None of these answers is correct.Fiscal policy is spending and taxation of the executive branch of the federal government; in recessionary times, what initiatives in spending and or taxation are going to help the economy?Which one of the following statements regarding fiscal policy and the budget is correct?(a) When the government plans to stimulate economic activity, it can increasespending or reduce taxes;(b) Revenue from tax is always greater than government spending in SouthAfrica;(c) Demand management only refers to fiscal policy;(d) A contractionary fiscal policy should be implemented to combatunemployment.
