Fiscal policy nowadays are focused on eliminating GDP gap  True  False

Q: Fiscal policy determines the level of interest rates.True or False

A: Fiscal policy: It refers to the policy which is used by the government so that it can make…

Q: When the economy is going through recessionary gap, which of the below policy is more likely to be…

A: Aggregate Demand curve (AD) is the downward sloping curve which shows an inverse relationship…

Q: A contractionary fiscal policy shifts the aggregate demand curve leftward. true or false?

A: Fiscal Policy: It refers to the decision of the government regarding spending and taxation.…

Q: If the economy above was at point D, a good thing to do would be to increase government spending.…

A: Increasing government spending or reducing government spending to energize a sluggish economy,…

Q: fiscal policy

A: The fiscal policy (FP) is a tool in hand of government to regulate and control the economic…

Q: Use the Keynesian cross to explain why fiscal policy has a multiplied effect on national income.

A: Keynesian cross is basic model of income determination where the fiscal policy and planned…

Q: Refer to the figure above. If the economy is at point b, to close the output gap the appropriate…

A: When the economy is at point B, the gap is inflationary gap. The actual output is higher than…

Q: Expansionary fiscal policy occurs when the government decreases spending or increases taxes to…

A: Fiscal policy is the tool used by government to control the economy.

Q: Discussion 4 Discuss the "FISCAL POLICY: A KEYNESIAN PERSPECTIVE" was John Maynard Keynes Right?…

A: According to keynes,fiscal policy was very important for government.It needs to be initiated…

Q: Describe the role of fiscal policy in the 20th century during the so-called US “golden age” period,…

A: The AD-AS model explains the Keynesian model and its effect on the price level and the quantity of…

Q: Presidential candidate trump promised in mid 2016 that if he became President, he would never have…

A: A budget deficit occurs when expenses exceed revenue and indicate the financial health of a country.…

Q: Fiscal Policy: End of Chapter Problem   Examine what the "three difficulties with using fiscal…

A: Answer - "Thank you for submitting the question. But, we are authorized to solve only 3 subparts .…

Q: Using an aggregate supply and demand graph, show what happens when expansionary fiscal policies are…

A: Expansionary fiscal policy refers to the government policy that increases in government expenditure…

Q: Suppose equilibrium GDP is less than full-employment output and the economy is in a recession. What…

A: If the economy is in a slump and equilibrium GDP is below full employment, the government's goal…

Q: Explain the reasons why lags in fiscal policy can create statements such as this: “The member of…

A: Fiscal policy refers to the one of the types of economic policies, which is implemented by the…

Q: How to calculate the level of GDP base on the MPC & MPS? Historical durations of recessions? The…

A: Hi, As you have posted multiple questions, we will answer the first one as per our policy. KIndly…

Q: Automatic stabilizers   a)increase consumption during a recession above what it would otherwise be…

A: Automatic stabilizers work to maintain the equilibrium in the economy.  Too much of inflation or…

Q: Which statement below is true of ONLY fiscal policy? Uses government expenditures to create demand…

A: The aggregate demand refers to the total amount of all the goods, and services which are demanded in…

Q: A government increases the corporate tax rate from 15 to 17% in an economic recession. Fiscal policy…

A: Fiscal policy can be of two types, procyclical and anticyclical.

Q: In 2005 national government spending is $4.00 trillion and tax collections are $4.00 trillion. This…

A: Budget refers to the amount of money that the government of a nation has, which it intends to spend…

Q: Price Level 상 The graph below depicts an economy where a decline in aggregate demand has caused a…

A: [a] Change required to restore the long-run equilibrium output = 400 - 320 = $80 billion. Thus, the…

Q: Why the aggregate supply (AS) curve is relatively flat within the low ranges of aggregate output and…

A: Aggregate supply refers to the total value of goods and services available for purchase at a…

Q: Cite the five major demand-side components of GDP. Then, identify the major elements affected by…

A: Gross domestic product of a country is the market value of all final commodities and services that…

Q: Counter-cyclical fiscal policy” intends to ... Group of answer choices a. Stop the business cycle b.…

A: The answer is - d. smooth out the business cycle

Q: Imagine Sri Lanka is trying to reduce inflation using a contractionary fiscal policy. Discuss the…

A: The government uses fiscal policy to stabilize the economy when it is overheated or output growth is…

Q: In a recession, needs-tested spending ________ and induced taxes ________. increases; increase…

A: Fiscal policy has two major parts: government spending(G) and taxes(T). Needs tested spending is the…

Q: Given a government budget, a recession increases the federal deficit due to autmatic stabilizers All…

A: A recession is a period of falling real GDP.

Q: For questions 34-39 choose whether each is an example of: fiscal policy a. discretionary b.…

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

Q: If the government announces that it has increased the corporate tax rate from 25% to 35% and the…

A: Taxation is an instrument of the fiscal policy.

Q: Briefly discuss how time lag could be an argument against policy activism. What is the role of…

A: The government of a nation adopts various policies in order to bring stability in the economy. The…

Q: compare monetary and fiscal policy in classical and keynesian model. Be precise

A: Fiscal policy affects aggregate demand through changes in government spending and tax assessment.…

Q: Policy Failure Fiscal policies can work only if private enterprises respond to them in certain way;…

A: Fiscal policy is the policy of the government regarding financial matters such as the tax rate of…

Q: In order to boost the economy, the government should implement expansionary fiscal policy by…

A: Fiscal policy is the tool used by government to achieve the objectives of economy such as economic…

Q: If a recession persists due to nominal wage and price stickiness (i.e., slow adjustment of nominal…

A: Fiscal policy is set by the government which shows the changes in government spending or taxes.…

Q: Automatic stabilizers are increases in spending and reductions in taxes that_ Are enacted by the…

A: Answer: Correct option: C (Are the result of existing tax and revenue spending rules) Explanation:…

Q: How can fiscal policy eliminate GDP gap

A: Fiscal policy refers to how the government uses spending and tax policies to influence economic…

Q: Show effect of expansionary fiscal policy in the short run and medium run. AS AD model using ISLM…

A: The aggregate demand is the downward sloping curve which sows the aggregate demand for all the goods…

Q: Country D experiences a recession due to a decrease in consumer confidence. There are two…

A: Decline in consumers confidence results in decline in demand for consumer goods, thus there would be…

Q: Automatic stabilizers are increases in spending and reductions in taxes that__ ?which one? a.Are…

A: According to Keynesian macroeconomics, the change in aggregate demand is able to affect the output…

Q: What kind of fiscal policy will you use to fight against inflation. Explain it briefly.

A: Fiscal policy refers to changes in the federal government purchases and taxes, which are intended to…

Q: Can you indicate 2 built in stabilizers and show they function during a recession and expansion.

A: Two automatic stabilizers in recession are:  Automatic stabilizers are mechanisms incorporated into…