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Explain fiscal policy and give an exmple of how it could be applied to the current COVID situation in the United States.
The Fiscal Policy (FP) is a tool of government through which it manages government expenditure or taxes. Due to COVID situation, the economic activities have affected adversely. The consumer demand has reduced, which impacted the Aggregate Demand (AD).
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- Explain how a shift from a government budget deficit to a budget surplus might affect the exchange rate.Discuss the current Fiscal Policy with the impact of the coronavirus on macroeconomics in place to support the US economy. Also, explain how the Fiscal Policy is expected to impact GDP, Inflation and unemployment Please do fast .. ASAP .. fastDiscuss the current Fiscal Policy with the impact of the coronavirus on macroeconomics in place to support the US economy. Also, explain how the Fiscal Policy is expected to impact GDP, Inflation and unemployment. Plz do fast asap
- Explain fiscal policy and give examples on how that could be applied to the current COVID economics situation in the United States.a. In the textbook, you read that Tyler does not save and planaccording to the theory of Ricardian equivalence but Alex is moreof a “Ricardian.” In light of this, who probably cuts back theirspending the most when taxes temporarily rise: someone like Tylerwho is not “Ricardian” or someone like Alex who is?b. If the U.S. government wants to use fiscal policy to shift ADaround easily, which one would the U.S. government prefer tomake more copies of: Tyler or Alex?What will be the effect of “contractionary fiscal policy of abroad” on net export, saving and interest rate? Show your answer with the help of graph and also properly explain
- What will be the effect of “contractionary fiscal policy of home” on net export, saving and interest rate? Show your answer with the help of graph and also properly explain'The U.S., world's largest economy, went into recession in February of 2020. It has taken a broad range of steps to combat the economic disruption caused by COVID-19. In response to this crisis, governments have enacted sweeping and sizable fiscal stimulus of trillions of dollars.' Is it an appropriate policy response if the primary responsibility of the government is to maintain economic growth? Explain the significance of Fiscal policy for an economy? Is there any difference in the two approaches of fiscal expansion through - direct transfer benefit and government spending directly on purchase of goods and services that may influence real GDP? What role does multiplier play? Explicate. Support your answer with the suitable diagram/s.a) Suppose that there are no crowding-out effects and the MPC is 0.8. By how much must the government increase expenditures shift the aggregate-demand curve right $10 billion? b. The model of Long-run Growth, proposes that fiscal policy can have lasting effects on savings, investment, and economic growth. On the other hand, the model of Aggregate Demand-Aggregate Supply suggests that the only long run effect of fiscal policy is an increase in the price level. How could you use the Aggregate Demand and Aggregate Supply model for a more accurate description of the short-run and long-run effects of an increase in government spending? Could you distinguish between different uses of government expenditures to predict their effects on prices and output?
- 2. Which of the following would not reduce the budget deficit or would notincrease the budget surplus?a. Raising income taxesb. Switching from direct expenditures to tax expendituresc. Selling the Parliamentary buildingsd. Cutting social security paymentsThe President of Westeros hires you as an economic consultant. He is concerned that theoutput level in Westeros is too high and that this will cause prices to rise. He feels that it isnecessary to reduce output by $10 billion. He tells you that the MPC in Westeros is 0.6.Which of the following would be the best advice to give to the Westeros president?A) reduce government purchases by $4 billionB) increase taxes by $10 billionC) reduce government purchases by $10 billionD) increase taxes by $2.5 billionIn 2010, the country of Lykesville had a balance budget, no debt, and its GDP was $31500. In 2011, it spent $11500 and had $100000 in tax revenue, and its GDP in creased to $37500. In 2012, it spent $13500 and had $13000 in tax revenue, and its GDP further increased to $37500. Did Lykesville runa budget deficit or budget surplus in 2012? What was Lykesville's Debt-GDP ration, expressed as a % at the end of 2012?
