Critics of discretionary fiscal policy emphasize a. the monetary cost of discretionary fiscal policy. b. the failure of automatic stabilizers in preventing a recession. c. the inflationary effects of discretionary fiscal policy. Od. implementation lags. e. the unreliability of policy rules. 000

Q: s has happened in southern Chile with rains that generated heavy losses to agricultural sector, in…

A: Legal maximum price is also known as price ceiling set by the government below the equilibrium price…

Q: In the Keynesian AE model, if the autonomous components of consumption, investment, government…

A: The unplanned inventory is a monetary time period that refers to the distinction between the…

Q: If the current price of a product is above the market equilibrium price, there is OA. excess demand,…

A: Disequilibrium in economics refers to a state of imbalance in a market where the quantity supplied…

Q: Cost and revenues (dollars) 0 Text Alternative с d MC Break-even point (normal profit) Shutdown…

A: The shutdown point: In the short run, the firm is willing to supply output if it is able to cover…

Q: On the way into school you hear the following report on the radio: "inflation for the month of…

A: Inflation refers to the rise in the general price level over a considerable period. Inflation means…

Q: An appreciation of the US dollar would make US exports more expensive overseas and foreign goods…

A: The relationship between exchange rates and a country's economic performance is a critical aspect of…

Q: If You-Will-Never-Pay-It-Off Loan Company lends you $150 on Monday, and you have to pay $250 after…

A: The term "effective interest rate" (EIR) refers to the rate used to determine the true return on…

Q: If the unemployment rate is 10%, while the number of employed individuals is 900, what is the labor…

A: Labor force is the sum of employed people and unemployed people.  Labor force participation rate is…

Q: Equilibrium, ES & ED 7. According to the following gaph, 40 36 30- 25 204 15 10- 200 300 400 500 sóo…

A: Equilibrium occurs at a point where the quantity demanded equals the quantity supplied.

Q: Matthew has the following utility over bundles (x₁,x₂): U(x₁, x₂) = 4₁√√x₁ + x₂. The prices in the…

A: If the consumer preferences are such that, he wants to consume a good in fixed amount beyond certain…

Q: Exhibit 7-6 Q₂ Quantity S Refer to Exhibit 7-6. If the market is in equilibrium and then the…

A: The government-legislated minimum price (P) set above the equilibrium P in a market is known as the…

Q: A company sells watches for $1,500. The unit variable cost is $500. Fixed manufacturing costs tota…

A: Selling Price(SP)=$1,500Variable Cost per unit(VC) = $500Fixed manufacturing Cost=$50,000Fixed…

Q: Suppose the supply of housing construction is infinitely elastic at a price of $150 per square foot.…

A: Excess burden, or deadweight loss, occurs when a tax is imposed on a good or service, leading to a…

Q: The most important feature of a central bank is the size of the money supply it controls. O its…

A: Central bank refers to a institution that uses its monetary policy to maintain the economic…

Q: 5) Consider the following simultaneously move game. Player 1\Player 2 Top Middle Bottom Find Nash…

A: A game consists of players, strategies and payoffs. Each player chooses among a set of strategies…

Q: You are a monopolist serving a single market but you have 2 different factories. The market demand…

A: A monopolistic market, often referred to simply as a monopoly, is a market structure characterized…

Q: On a 3 year fixed payment loan, the fixed payment equals $3,900 a year. If the interest rate on the…

A: Loan refers to an amount of money borrowed or lended to be paid back or received back with an…

Q: G Spending and NTR Budget Surplus Budget Deficit Y₁ V1 V2 V2 Y3 V3 NTR Real GDP BL Real GDP In the…

A: A balanced budget occurs when a government's total revenue is equal to its total expenditure for a…

Q: A number of coal burning steam locomotives pass by several largely populated towns each day spewing…

A: The Coase Theorem is an economic theory that suggests that if property rights are well-defined and…

Q: Which of the following is true regarding the use of purchasing power parity​ (PPP)? (Check all that…

A: International cooperation is the foundation of trade ideals. The concept of comparative advantage,…

Q: You finance your lake house purchase by borrowing $190,000 at 5.5% per year compounded monthly. The…

A: When financing a significant purchase, such as a lake house, individuals often opt for a mortgage…

Q: Samantha is lending Jack $1,000 for one year. The CPI is 1.60 at the time the loan is made, and they…

A: Nominal interest rate is the rate of interest that is not inflation adjusted. Real interest rate is…

Q: 3. Types of unemployment The three people described in the following table are categorized as…

A: A person is unemployed when he/she is willing to work but not getting a job, and continuously…

Q: Given the balance sheet of BSP Bank as follows: Liabilities Deposits 30000 Assets Reserves 25000…

A: As central banks make monetary policy decisions, they actively monitor company expectations in order…

Q: Exhibit 12-6 Lorenz curves Cumulative percentage of income 111 Cumulative percentage of families…

A: The population income and wealth represented is known as the Lorenz curve developed by Max Lorenz in…

Q: Ghose and Han (2014) found that the elasticity of demand for Google Play apps is 3.7. This…

A: The PED is defined as  % change in quantity demanded divided by the % change in price.

Q: In recent decades, the cost of health care has Multiple Choice O risen fast due to both rising…

A: Healthcare alludes to the organized arrangement of medical services, treatments, and backing to…

Q: 35 30 25 20 16 15 12 10 I 5 O 720 O 900 I O 960 O 600 P₁₁ 10 20 30 45 50 60 70 80 90 100 110 Q…

A: In perfect competition there are many firms producing identical goods which makes the firms price…

Q: Calculate the elasticity of demand, if the demand function is Q=160-8p + 32Y, at the point where p =…

A: Price elasticity is the proportion of the percent change in the amount demanded (Qd) or supplied…

Q: Consider a coal mining company that can mine coal this year or next year. As expected future profits…

A: User cost refers to the opportunity cost associated with using or extracting a non-renewable…

Q: A headline reads "Perfect Weather Brings Record-High Coffee Harvest." This situation would lead to…

A: The demand curve shows combinations of quantity demanded for different price levels. As prices…

Q: Price Level 110 100 A C 900 960 AS1 B 1100 AD2 AD1 Real GDP FIGURE 23-5 Refer to Figure 23-5.…

A: In general, a multiplier is an economic element that, when raised or lowered, raises or lowers…

Q: 7. Effect of a tax on buyers and sellers The following graph shows the weekly market for handbags in…

A: A tax is implemented by the government that are to be paid by the consumers over the market price…

Q: 1. The intersection of the both the goods market and the money A) interest rate; price level B)…

A: In order to delineate the association between interest rates and income (or creation) in an economy,…

Q: Alternative vote may violate monotonicity (non-negative responsiveness). True O False

A: Monotonicity alludes to the property of a function or a mathematical relationship where the…

Q: Consider the table on the right, which shows business investment in inventories for each quarter…

A: Business cycle: A business cycle, also known as an economic cycle or trade cycle, refers to the…

Q: Question 1. The price ceilings that state and local government place on apartments will cause: A.…

A: Demand refers to the quantity of goods and services that a consumer demands at a point in time.…

Q: Figure 32-1 percent 8 10 20 30 40 50 60 70 $billions Refer to Figure 32-1. In the Figure shown, if…

A: The money demand curve is the downward-sloping curve. The money supply curve is the upward-sloping…

Q: The Coase theorem will apply only if A. the courts can be used to determine the amount of…

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

Q: Aggregate Spending A B GDP D O decrease spending and increase taxes. O decrease spending and…

A: Fiscal policy is the government policy to control the overall macroeconomic activities of a country.…

Q: There are currently N identical firms in a market. If it is a perfectly competitive market, the…

A: The individual supply curve is an indicator of an output a producer in a perfectly competitive…

Q: A heart surgeon starts with an initial price of $3,000 and reduces price to $2000. In response,…

A: Price elasticity of demand measures the responsivness of change in quantity demand to change in…

Q: QUESTION 19 A decrease in demand for a good generally implies that consumers are willing to pay a…

A: Demand refers to the quantity of a good or service that consumers are willing and able to purchase…

Q: If ExxonMobil invests in Venezuela's oil fields, it runs the risk that Venezuela will later…

A: A Nash Equilibrium is a fundamental concept in the field of game theory, which is a branch of…

Q: QUESTION 5 There are two countries: A and B. Here, we consider the trade equilibrium with…

A: The definition of trade can be simplified in a single sentence, the achievement of needs by using…

Q: Other things being equal, an increase in a country's interest rates will cause its currency to…

A: An exchange rate is the rate at which one country's currency can be exchanged for another country's…

Q: 6. Individual and market supply Suppose that Raphael and Susan are the only suppliers of donuts in…

A: The supply curve is the upward sloping curve. Equilibrium is where the demand curve intersects the…

Q: PS 120 yen 100yen Q2 Q1 Increase in price by 200,000 yen. O Increase in price by 800,000 yen. O…

A: Equilibrium PricePrice is computed in a free market by the interaction of supply and demand. When…

Q: Andover Bank and Lowell Bank each sell one-year certificates of deposit (CDs). The interest rates on…

A: An interest rate is the cost of borrowing money or the return earned on savings or investments,…

Q: Colton and his children went into a grocery store where they sell apples for $1.25 each and mangos…

A: A budget constraint refers to the limitations that individuals, households, or organizations face…

Fiscal Policy and Money Market

Fiscal policy is one of the important tools that is used by the government to control inflation or aggregate demand in the economy. Under this policy, there are two rules which are used by the government, one is the expenditure of the government and the other is the taxation or income of the government which it collects from the public.