Illustrate the concept of Ricardian equivalence using the demand and supply of financial capital graph.

Q: What is the importance of fiscal policy during times of economic recession?

A: Fiscal policy refers to the type of the economic policy in which the government of a country tries…

Q: Explain whether or not you agree with the premise of the Ricardian equivalence theory that rational…

A: Rational expectation which was introduced by new classical economist . If people have rational…

Q: A government surplus can decrease investment through the crowding-out effect because the surplus…

A: A government surplus can decrease investment through the crowding-out effect because the surplus…

Q: The current market rate of interest is 10 percent. At that rate of interest, businesses borrow $300…

A: The theory of Ricardian equivalence has been largely dismissed by Keynesian economists and ignored…

Q: What are the consequences of a high Debt to GDP ratio for the economy?

A: The debt-to-GDP ratio is the ratio of a country's government debt and its gross domestic product…

Q: Briefly explain how a budget deficit arises and what corresponding action is typically by taken by a…

A: Budget deficit arises when the expenditure of the government exceeds the revenue ie the government…

Q: What is the index of leading economic indicators, and how does it relate to discretionary fiscal…

A: A business cycle represents the periodic movement of the aggregate output of an economy in the…

Q: In what ways do future generations benefit from this generation’s deficit spending?  Cite three…

A: Public deficit: It refers to the situation in which government expenditure exceeds its revenue…

Q: Briefly write about the implications of Primary deficit

A: First of all we must know no that what does it mean by primary deficit to stop whenever we calculate…

Q: What are some of the ways fiscal policy might encourage economic growth?

A: Fiscal policy is a macroeconomic policy that is implemented by the government for monitoring and…

Q: Briefly analyse the various policy measures that a government might have to undertake to deal with…

A: We show A fiscal deficit occurs when the government's expenditures exceed its revenues in a given…

Q: ssess the following statements: 1. At any moment in time, households (in aggregate) demand a greater…

A: Statements 1) 1st statement is true because when the interest rate is lower then firms wants to…

Q: From 2008 to 2012, in the aftermath of the financialcrisis, the ratio of government debt to GDP in…

A: During 2008 to 2012, the US economy was under a financial crisis. The slowdown in economic activity…

Q: How does tax cuts encourage saving and investment

A: Tax reduce the personal disposable income of an individual which leads to reductions in savings and…

Q: Briefly analyse the various policy measures that a government might have to undertake to deal with…

A: A fiscal deficit is a discrepancy between a government's revenue and expenditures. Spending over its…

Q: Ql: Discuss in details the impact of external debt on the performance of Jordanian economy, and how…

A: Any economy facing an excessive amount of foreign debt can hinder countries capacity which can be…

Q: What is meant by revenue deficit and what does it indicate

A: There are three main deficit of any government which are:- (1) Revenue deficit (2) Fiscal deficit…

Q: One of the main arguments against using Fiscal Policy is the crowding out effect. Suppose the…

A: Crowding out effect Crowding out effect can be defined as a situation when increase in interest rate…

Q: The following table shows government spending and tax revenue for a hypothetical economy over a…

A: A budget deficit occurs when the actual expenses of the government exceeds the planned expenses.

Q: Which of the following, regarding debt and growth, is false?    a. If there is no (nominal) GDP…

A: a-Central banks can support development by cutting loan costs, which (in principle) prompts simpler…

Q: Do I have this queshtion right I think its positive. I'm not sure if I'm correct.

A: Economic growth.From the given graph, if these countries have gross government debt is excess of…

Q: Accordingtothetextbook,whichofthefollowingstatementsis(are)correct? (x)  An advantage of a…

A: A consumption tax is a taxing system in which people are charged on how much people consume rather…

Q: The table gives the government outlays and tax revenues from 2015 through 2019 for two countries.…

A: The above table gives the govt outlays and the tax revenues for the respective years.

Q: How does tax cuts encourage savings and investment

A: Since there is inverse relationship between the willingness to work and tax rate.

Q: How does the two-good, two-country version of the Ricardian model differ from the two- country,…

A: The Ricardian model of international trade tries to elucidate the inequality in comparative…

Q: What is Ricardian equivalence? Give at least three reasons Ricardian equivalence might not…

A: David Ricardo was a British classical economist who gives various macroeconomic theories such as…

Q: Who is in charge of fiscal policies, and how do their different multipliers work?

A: The fiscal policy is the use of the government budget to affect an economy. when the government…

Q: What is the role of fiscal policy in developed countries? Give example

A: It is common knowledge that fiscal systems have a significant role in the effect of any economy.…

Q: Based on the Ricardian equivalence, increased government borrowing by $1 will cause: The public to…

A: The Ricardo-Barro effect, commonly referred to as the Ricardian equivalence, is an economic theory…

Q: t-finance

A: The Ricardian equivalence proposition is a hypothesis which holds that consumers are in turn forward…

Q: What is a government budget deficit? How doesit affect interest rates, investment, and…

A: A government budget deficit occurs as spending exceeds revenue and shows a country's financial…

Q: explain on a graph what would happen if the government discouraged investment through tax policy and…

A: If there is a tax policy that discourages investment, then the supply would adjust to attain market…

Q: During the most recent recession,some economists argued that the change in the interest rates that…

A: In the financial market, the equilibrium interest rate is determined at a point where the demand…

Q: The current market rate of interest is 10 percent. At that rate of interest, businesses borrow $300…

A: Demand curve for the loanable fund shows the level of demand for loan at different interest rate.…

Q: If the government increases it discretionary expenditure, explain how the structural deficit might…

A: Nonessential expenditure of government is known as the discretionary expenditure. The chronic…

Q: Ricardian equivalence: Suppose that the government fears the economy mightbe heading into a…

A: Ricardian equivalence: - it is the theory given by David Ricardo which states that the consumers…

Q: ? No explanation needed. Thanks in advance.   35) When a country has public-sector net borrowing,…

A: Government is a prime authority that rules and monitor all the activities taking place in a country.…

Q: Mention a type of fiscal policy or monetary policy that is currently being implemented. Then discuss…

A: The fluctuation in the economic activity is tracked by the business cycle. In an economy, the fall…