Identify a change in fiscal policy that will shift the composition of output toward investment. Present a composition of output analysis to explain why the policy you suggest will tend to shift the composition of output toward investment.

Q: If government policy makers were worried about the inflationary potential of the economy, which of…

A: When government worried about inflation, it can use contractionary fiscal policy to reduce the…

Q: In case of DEFLATION, mention that which particular type of fiscal policy will be used and why and…

A: Deflation occurs when the price level falls in the economy. It is usually when people prefer to hold…

Q: Which of the following illustrates the effectiveness lag? A.Policymakers implement contractionary…

A: Effectiveness lag can be understood as when the policy is implemented or any change in policy is…

Q: When an economy is already at full employment, what is the outcome of expansionary fiscal policies…

A: The fiscal policy is an automatic stabilizing policy in which the government either use it spending…

Q: Explain and show the consequence for fiscal policy if the marginal propensity to consume is a…

A: Fiscal policies are the public authority made approaches made to control, fortify and support the…

Q: Specify whether expansionary or contractionary fiscal policy would seem to be most appropriate in…

A: Note: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question…

Q: The change in aggregate demand that results from fiscal expansion changing the interest rate is…

A: Crowding out Effect states that government spending is increased in order to balance the reduction…

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: Expresses in detail the effects of expansionary and contractionary fiscal policy on income and the…

A: In an economy, fiscal policies are implemented by the government to influence the aggregate demand…

Q: Will a discretionary fiscal policy action that involves spending $100 billion have the same overall…

A: The discretionary fiscal policy refers to changes in the tax rate or the level of government…

Q: Which of the following is a category of fiscal policy?A) government policies regarding transfer…

A: Since you posted multiple subpart questions, we will provide the answer for first three subpart…

Q: Specify whether expansionary or contractionary fiscal policy would seem to be most appropriate in…

A: Expansionary monetary policy is used to boost up the economic growth. It aims to increase the…

Q: An example of a fiscal policy designed to increase real GDP is a. a cut in taxes. b. an increase in…

A: Fiscal policies are designed to influence the aggregate demand, which further leads to affect the…

Q: According to the classical macroeconomic model, expansionary fiscal policy has an inflationary…

A: Fiscal Policy is a policy by which the governments adjusts its amount of expenditure and taxes…

Q: Define what is 'automatic stabiliser' in fiscal policy, and provide 2 examples

A: Meaning of Fiscal Policy: The term fiscal policy refers to the situation under which the…

Q: Which of the following is NOT a fiscal policy action? Group of answer choices decreasing government…

A: Fiscal policy is used by governments that have an economic influence. Changes in taxation and…

Q: Which of the following is an example of contractionary fiscal policy? A. Cutting spending B.…

A: Fiscal policies are managed/controlled by the government of the country whereas monetary policies…

Q: Which type of discretionary fiscal policy is likely to have the smallest overall effect on GDP…

A: Discretionary fiscal policy is the government policy to control economic growth and aggregate…

Q: List what specific, deliberate actions the federal government could take to enact expansionary…

A: Expansionary fiscal policy is aimed at increasing aggregate demand when the economy is in a…

Q: Which one of the following propositions would be consistent with a supply-side view of fiscal…

A: Macroeconomics analyzes the economy as a whole. It studies aggregate economic concepts such as…

Q: Which kind of economic fiscal policy measures do you recommend at the current economic situation…

A: Stagflation is defined as a period of poor economic development and relatively high unemployment—or…

Q: How relevant is the multiplier concept to the implementation of expansionary and contractionary…

A: Spending multiplier: - it is a fraction that shows the magnitude of the change in national income…

Q: (Fiscal Policy) Define fiscal policy. Determine whether each of the following, other factors held…

A: Answer- Fiscal Policy - This is a policy which a government adjusts its spending levels and tax…

Q: What is fiscal​ imbalance? Fiscal imbalance is the​ _______ value of the​ government's commitments…

A: What is the fiscal​ imbalance? Fiscal imbalance refers to a situation where all of the government's…

Q: Differentiate between the expansionary fiscal policy and contractionary fiscal policy with diagram…

A: Fiscal Policy: Fiscal policy is used to influence aggregate demand and maintain stability in the…

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: Supply-side fiscal policies focus on improving the incentives to work, save, and invest.   Group of…

A: In the market, when the government wants to implement fiscal policy, it can either impose…

Q: What is classes as an expansionary fiscal policy?

A: Fiscal policy is the government-imposed policy used to change economic conditions like demand,…

Q: Which of the following might increase the government budget deficit?     contractionary fiscal…

A: Government can have balanced budget, budget deficit or budget surplus. Government imposes tax to…

Q: Explain how fiscal policy can be implemented if an economy is in the downswing of a business cycle.

A: Fiscal policy is tools available to the central government to mitigate the economic consequence by…

Q: Identify the effects of fiscal policy on the economy

A: Fiscal policy refers to the government policy that stabilizes th economy through bring changes in…

Q: Which of the following is a reason for using expansionary fiscal policy during a recession? a)…

A: A recession is a period of economic slowdown. It is defined as a significant decline in economic…

Q: By using graphs, show and explain the effects of an expansionary fiscal policy on the goods market…

A: Expansionary fiscal policy is defined as how the government initiates with spending more and even…

Q: Evaluate the effectiveness of fiscal policy as a tool to reduce unemployment.

A: Fiscal policy is a policy used by the government in which it influences the level of government…

Q: Classify each statement as an example of expansionary fiscal policy, contractionary fiscal policy,…

A: Contractionary fiscal policy: Contractionary fiscal policy refers that when the government decreases…

Q: Which of the following is an expansionary fiscal policy? increase in taxes only both increase in…

A: Fiscal policy is the term used to describe how the government uses spending and taxation to affect…

Q: Identify the type of Fiscal Policy The government reduces the wages of its employees while raising…

A: In an economy, governement enter the market using its policies, which are known as fiscal policies.…

Q: Identify one fiscal policy action that could counter the increase in investments. Explain how this…

A: Fiscal policies are actions taken by the government to stabilize the economy. The policies include…

Q: Assume a contradictory gap of $4 trillion. With MPC equal to 0.75, what would be the recommended…

A: The use of government spending and tax policies to influence economic conditions, especially…

Q: Explains in detail fiscal policy, its role, and its effects on short-term and long-term economic…

A: Fiscal Policy: The Fiscal Policy is the revenue and expenditure policy of the government to…

Q: Explain how the implementation of this policy is related to the simple spending multiplier. Explain…

A: Fiscal policy is a branch of monetary policy where the government try to manage the or adjust the…