Fiscal policy includes decisions about a) taxes, government spending, and government borrowing. b) government spending, banking regulations, and the money supply. Oc) taxes, banking regulations, and government borrowing. O d) taxes, government spending, and the money supply. O e) taxes, banking regulations, and the money supply.
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- Explain whether or not you agree with the premise of the Ricardian equivalence theory that rational people might reason: Well, a higher budget deficit (surplus) means that Im just going to owe more (less) taxes In the future to pay off all that government borrowing, so Ill start saving (spending) now. Why or why not?A government starts off with a total debt of $3.5 billion. In year one, the government runs a deficit of 400 million. In year two, the government runs a deficit of 1 billion. In year three, the government runs a surplus of 200 million. What is the total debt of the government at the end of year three?“Crowding out” refers to the situation in whicha. borrowing by the federal government raisesinterest rates and causes firms to invest less.b. foreigners sell their bonds and purchase U.S.goods and services.c. borrowing by the federal government causesstate and local governments to lower theirtaxes.d. increased federal taxes to balance the budgetcause interest rates to increase and consumercredit to decrease.
- How does the government budget process impact fiscal policy decisions, and what are the potential consequences of budget deficits and surpluses? A) The government budget process has no bearing on fiscal policy decisions. B) The government budget process involves decisions about government spending and taxation; budget deficits occur when spending exceeds revenue, while surpluses occur when revenue exceeds spending. Deficits may lead to increased borrowing and interest payments, while surpluses can reduce government debt. C) The government budget process exclusively focuses on taxation and has no relation to spending. D) Budget deficits always lead to economic stability.Which of the following would most likely occur if the federal government decreased its spending and reduced the size of the budget deficit during a period of full employment? a. The rate of inflation would decline. b. Interest rates would fall. c. The rate of inflation would rise. d. The government spending multiplier would double. give me correct and incorrect answer explanation and Dont use chatGPT otherwise i give multiple downvoteThe economy is experiencing negative GDP growth and high unemployment. Which fiscal policy action should the government implement in an attempt to fix this problem? A.) increase spending B.) raise taxes C.) increase the reserve requirement D.) decrease interest rates
- Question 6: Compare and contrast the function of fiscal policy during short term and long term period. Question 7: Name SIX (6) types of tax and describe each of its function. Question 8: Briefly describe FOUR (4) functions of money. Question 9: Briefly discuss the role of central bank at your country.Answer the following questions on fiscal policy: (a) According to data from the Office of National Statistics, in January 2022 the UK public sector spent less than it received in taxes resulting in a primary surplus. Considering that the UK government was previously running a deficit, and assuming that UK GDP growth is higher than the real interest rate paid on the debt, use a phase line to show how the surplus may affect debt accumulation in the UK. (100 words excluding the graph) (b) In the Financial Times article “UK public finances vulnerable to higher inflation, says Sunak” (2 March 2022), we read: “Rishi Sunak[*] warned that the UK economy and public finances were “vulnerable” to higher inflation and interest rates in comments ahead of the spring statement suggesting that tough decisions could be required in the months ahead.” “The [Treasury] committee expressed concern that the government had contributed to the UK’s high rate of inflation which hit by 5.5 per cent in January…Naked Economics: Undressing the Dismal Science Book by Charles Wheelan This question is based on the section of "Keeping Score" in Wheelan's Naked Economics, where the author discusses budget deficits and surpluses. Which of the below statements is INCORRECT? A) If an economy slips into a recession, tax revenues will fall, but raising taxes will certainly worsen the situation. B) A budget deficit occurs when the government spends more than it collects in tax revenues. C) An economy should steer clear of deficit budgets even during economic recessions. D) A budget deficit is funded by borrowing money by selling treasury bonds, which requires the government to pay back the interest on the amount borrowed, plus the principal borrowed. E) Since 2001 the U.S. has been consistently spending more than the tax revenue it collected, and the amount borrowed plus interest owed has been accummulating to a rather large national debt.
- Like any economic crisis, unemployment rises, aggregate income falls, and tax collections drop during the Great Recession. While unemployment rises, safety net spending rises. To stabilize the economy, the government appears to have just two options: harsh austerity (reduce spending) or more borrowing. It is difficult to defend cuts in federal government programs, especially those that provide a minimum standard of living for the poor, but increasing indebtedness hurts the economy. In a few words, analyze Costs of eliminating the budget deficit solely through (1) personal tax increases, and/or (2) through spending cut by decreasing in transfer payments (i.e., Social Security, Medicare and Medicaid) and in discretionary spending (such as defense and education budgets)Please Read the Following Paragraph and Answer the Following Questions Oman’s government will finance most of its budget shortfall in 2021 by borrowing to plug a fiscal gap battered by a decline in oil prices and the coronavirus pandemic. The Persian Gulf state is looking into borrowing that will cover 73%, or 1.6 billion rials ($4.2 billion), of the country's 2.2 billion-rial shortfall, with the remaining 600 million rials to be drawn from its reserves, according to a post on Twitter by the state-run Oman News Agency on Friday. The government based its 2021 budget plan on an oil price of $45 per barrel. Other highlights from Oman’s 2021 budget: • Expenditure is set to fall to 10.8 billion rials, a 14% drop from the previous year. • 2021 revenue is set to fall to 8.6 billion rials, a 19% decline. • Budget deficit at 8% of gross domestic product in 2021, 2.2 billion rials. Oman has taken measures such as reduced spending and plans to impose a 5% value-added tax in 2021.…Please Read the Following Paragraph and Answer the Following Questions Oman’s government will finance most of its budget shortfall in 2021 by borrowing to plug a fiscal gap battered by a decline in oil prices and the coronavirus pandemic. The Persian Gulf state is looking into borrowing that will cover 73%, or 1.6 billion rials ($4.2 billion), of the country’s 2.2 billion-rial shortfall, with the remaining 600 million rials to be drawn from its reserves, according to a post on Twitter by the state-run Oman News Agency on Friday. The government based its 2021 budget plan on an oil price of $45 per barrel. Other highlights from Oman’s 2021 budget: • Expenditure is set to fall to 10.8 billion rials, a 14% drop from the previous year. • 2021 revenue is set to fall to 8.6 billion rials, a 19% decline. • Budget deficit at 8% of gross domestic product in 2021, 2.2 billion rials. Oman has taken measures such as reduced spending and plans to impose a 5% value-added tax in 2021. It…