Is it better to concentrate on aggregate demand or aggregate supply? Why? According to Keynes, what are the major sources of economic instability? Fiscal policy is spending and taxation of the executive branch of the federal government; in recessionary times, what initiatives in spending and/or taxation are going

Is it better to concentrate on aggregate demand or aggregate supply? Why? According to Keynes, what are the major sources of economic instability? Fiscal policy is spending and taxation of the executive branch of the federal government; in recessionary times, what initiatives in spending and/or taxation are going

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter14: Macroeconomic Policy: Tradeoffs, Expectations, Credibility, And Sources Of Business Cycles

Section: Chapter Questions

Problem 10E

See similar textbooks

Similar questions

Keynes advocated the use of fiscal and monetary policy to stabilize an economy? When are the effects of these policies most beneficial? Select all that apply. Select one or more: In the short run When the economy is operating at full employment When the economy is operating significantly above full employment When the economy is operating significantly below full employment In the long run
From the perspective of someone using aggregate-demand and aggregate supplyanalysis, what is the impact of a tax cut when the economy is operating above fullemployment. Is this a wise policy? Why or why not?
According to Keynesian economics, what impact would a balanced budget amendment to the constitution requiring the federal government to balance its budget annually have on the economy?
According to Keynes, a. government spending should decrease during recessions. b. aggregate demand is most important to achieve potential output. c. aggregate supply is most important to achieve potential output. d. the government should not utilize fiscal policy to influence economic activity.
If you have the power to cut or increase taxes in your country with the aim of boosting aggregate demand, which tax will you most likely touch: Value Added Tax (VAT), Income Tax, or Corporate Tax? Will you cut it or will you increase it? Why? Provide a good explanation for your answer using good economic basis.
According to Keynesians, when should the federal government run a budget deficit and when should it run a surplus?
From a Keynesian point of view, which is more likely to cause a recession: aggregate demand or aggregate supply, and why?
Please discuss the need and use of fiscal policy in countries such as the UK during the crisis. Will the fiscal policy remain the key policy instrument in these sorts of countries in the near future? In what way is monetary policy constrained and might that constraint be relaxed? In the case of fiscal policy, how should it be altered to support economic recovery?
According to Keynes the source of high unemployment is: a. Excessive aggregate demand b. Insufficient aggregate demand c. An increase in aggregate supply d. Say’s law The federal government can alter aggregate demand by all of the following except: a. Purchasing more or fewer goods and services b. Raising or lowering taxes c. Increasing productivity or output per hour d. Changing the level of income transfers Which of the following is an example of fiscal policy? a. Fighting the war on terror b. Giving people school vouchers c. President’s Obama’s tax cut package d. All of the above are examples Which of the following is an example of fiscal policy? a. Fighting the war on terror b. Giving people school vouchers c. President’s Obama’s tax cut package d. All of the above are examples If MPC is .80, and government spending increases by $200 billion then: a. Total spending will increase by $200 billion b. Total spending will increase by $400…
Fiscal policy consists of intentional changes in the government's spending levels or tax policies designed to achieve specific macroeconomic goals such as full employment, price stability, or economic growth. By influencing the amount of total spending in the economy, the government can influence the position of the aggregate demand curve. Our theory tells us that aggregate demand will shift by a multiple of the change in spending or taxes. However, spending and tax changes have slightly different effects, as changes in taxes affect spending only indirectly by changing the amount of disposable income. An expansionary fiscal policy may be implemented to fight a recession, while a contractionary policy may be appropriate to control demand-pull inflation. Exploration: How do changes in government spending and taxes affect the equilibrium price level and real GDP? Discuss in detail use your economics textbook.
Using the AD/AS model construct two graphs that show how a recession can occur? Explain how discretionary fiscal or monetary policies can be used to moved the economy out of recession?
(Evolution of Fiscal Policy) What did classical economists assume about the flexibility of prices, wages, and interest rates? What did this assumption imply about the self-correcting tendencies in an economy in recession? What disagreements did Keynes have with classical economists?