Monetary and fiscal policy making that is carried out in response to a pre-set rule and does not respond to changes in economic activity is known as discretionary policy making. active policy making. Keynesian policy making. nondiscretionary policy making.
Q: Analyze fiscal policy in order the generate macroeconomic stability.
A: The policy that depicts making use of a collection of revenue by government and expenditure in order…
Q: The position of the AS-curve depends on Multiple Choice fiscal policy monetary policy consumer…
A: In an economy, aggregate supply curve is the survey that explains the overall production of output…
Q: Discuss in detail the role of fiscal policy in terms of stabilization under Classical and Keynesian…
A: Classical view The classical policy suggests that if expansionary fiscal policy is combined with a…
Q: Which of the following statements about Fiscal Policy is INCORRECT? choose the correct answer (a) In…
A: Fiscal policy is independently implemented or used by the government to make changes in the market…
Q: As discussed in the class, discretionary policies are the actions the administration takes in order…
A: The macroeconomic policies that are formulated in the wake of the changes in the economy, by the…
Q: All of the following are true of Reagan's economic policies, EXCEPT: O The GDP rose and inflation…
A: Reagan's economic policies were formed focusing on tax cuts, declines social expenditures and…
Q: Suppose the economy suffers a high rate of inflation According to Keynesian economists, the…
A: We are going to explain the relationship between inflation rate and fiscal contractionary policy to…
Q: Fiscal policy to solve short-run economic problems supports the Keynesian notion of A. there…
A: The use of government spending and tax policies to influence economic conditions, especially…
Q: If stability of the economy is the primary objective of Fiscal Policy, then an Annually Balanced…
A: An annual balanced budget refers to when the spending of the government during a fiscal year equals…
Q: Beginning at equilibrium E1 in Exhibit 1, when the government increases spending or cuts taxes the…
A: Answer to the question is as follows :
Q: Match the following terms with their definitions.…
A: From the above information, we will match the following terms with their definitions-
Q: Assuming prices and output are somewhat flexible, an increase in worthless government spending will…
A: Government spending is a component of Aggregate Demand. With the increase in Government spending (…
Q: Match- Identify each item as Expansionary Contractionary Policy Used to stabilize high price levels…
A: Contractionary policy is used to reduce inflation, GDP, employment, price level and used in the…
Q: Fiscal Policy is determined by The Federal Reserve All States Determine Their Own Fiscal Policy The…
A: Fiscal Policy: - the economic policies related to the government taxes and government expenditure…
Q: Fiscal and Monetary Policy scenarios. For each scenario explain the standard Keynesian…
A: Monetary policy and fiscal policy are two main policy measures to achieve the long term and short…
Q: Supply-side policies are government policies a)designed to influence the size of the general…
A: Supply Side Theory is a concept of growing the supply of goods and services with ambition to…
Q: Increasing the public debt can be associated with a. an expansionary fiscal policy. b. an…
A: (Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: Which economic policy, fiscal policy or monetary policy, is preferable for undesired increases in…
A: Continuous rise in prices leads to inflation. This could be controlled by contractionary monetary…
Q: According to the traditional Keynesian analysis, if the government increases spending and pays for…
A: A government budget deficit occurs when government spending is greater than government tax revenue.…
Q: The new classical explanation of aggregate supply is also known as Keynesianism monetarism the…
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Q: Macroeconomic policies are the set of government rules and regulations to control or stimulate the…
A: The monetary and fiscal policies are part of the macroeconomic policy which the government sets.…
Q: Question 8 Fiscal policy is: a change in the money policy to solve domestic problems. the use of…
A: Answer 8. The way the central government generates money through taxation and spends it is…
Q: Suppose aggregate demand is at AD2 and a recession occurs. The goal of an automatic stabilizer would…
A: A recession is a business cycle contraction that occurs when there is a broad fall in economic…
Q: According to Keynesian analysis; the proper government response to a recession is _________,whereas…
A: A recession refers to when the economy is producing less that its potential output. Expansionary…
Q: "There have been times when the federal government has kept pumping fiscal stimulus into the economy…
A: Gross Domestic Product (GDP) refers to the value of all the goods and services produce inside a…
Q: Government stabilization policy a. can stimulate aggregate demand, but only in the long run. b.…
A: The government stabilization policy consists of two types of policy monetary and fiscal policy.…
Q: According to the lectures, which of the following ideas are representative of (neo)classical…
A: We are going to use properties of Classical economics and Keynesian economics to answer this…
Q: upply-side economists: saw influence beyond in both the Bush and Clinton administrations.…
A: Supply side economics suggest that government policy should be used to improve incentives. This will…
Q: Which of the following is most likely to advocate the use of fine tuning? Supply-siders Classical…
A: In economics, fine-tuning refers to the situation when there is a use of economic policies to make…
Q: The idea of policy making taking place in response to a predetermined set of rules is referred to as…
A: A policy that is based on a predetermined set of rules is called passive policy. In Passive fiscal…
Q: the following statements is/are true? Group of answer choices Inside Lag for Fiscal Policy is much…
A: Outside lag is the time required for policy change to affect the economy. Does it include variables…
Q: Long-run economic growth can be achieved with Group of answer choices A rightward shift in the…
A: Economic growth is the situation when an economy is able to generate more output or income than the…
Q: With discretionary policy making, fiscal and monetary policies are usually immune to any lag times…
A: Economics is a branch of social science that describes and analyzes the behaviors and decisions…
Q: To affect the level of potential output, the monetary policy and fiscal policy must Question 1…
A: Monetary policy and fiscal policy are implemented to ensure economic growth and maintain balance.
Q: The rational expectations theory suggests that as the public learns more about the effects of fiscal…
A: Rational expectation theory suggests the economic agents have full information about the economy,…
Q: Fiscal policy attempts to achieve all of the following macroeconomics objectives EXCEPT, A)…
A: Fiscal policy is the policy which is used by the government to stabilise the economy and to reach…
Q: Which of the following scenarios is an example of an administrative lag? a)Policy makers obtain…
A: When government takes action against the instability of the economy then the policy measure is…
Q: Treasury yields have climbed in recent months along with investors’ expectations for a strong…
A: Treasury yields have climbed in recent months along with investors’ expectations for a strong…
Q: The government will have _____ flexibility in implementing countercyclical fiscal policy when the…
A: Answer: (1). b (More; small) Explanation: The government will have more flexibility when the…
Q: ome recheck stimulus measures in all current policy forms. These economists focus on the damaging…
A: A monetary stimulus includes lowering down the rates of "interest" to stimulate or grow the economy.…
Q: Total spending in the Keynesian model of a closed economy without government includes Select one: a.…
A: Total spending in the Keynesian model of a closed economy without government includes: b.…
Q: Active policy making refers to nondiscretionary policy making. relying on policies that act as…
A: Economics is a branch of social science that describes and analyzes the behaviors and decisions…
Q: During the COVID-19 pandemic, Canada as well as many countries experienced a recessionary phase.…
A: Given : During COVID-19 Pandemic, Canada as well as many countries experienced a recessionary phase.…
Q: In the Keynesian view a. all of the above. b. monetary policy can be ineffective when money demand…
A: Keynesian model refers to one of the widely applied economic theory that gives a specfiic approach…
Q: Part of the spending on the Caldecott Tunnel project in northern California came from the American…
A: In an economy, fiscal policy is when government make changes in aggregate demand and other…
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- The impact of Keynesian Policy can be diminished by secondary effects such as: a)Inflation – to the extent increasing Aggregate Demand causes inflation the impact on expanding the economy is dissipated by higher product prices b)Crowding-out effect of expansionary fiscal policy - To the extent expansionary Keynesian policy requires a government budget deficit and if this is financed by government borrowing, it may lead to rising interest rates, which will decrease private borrowing to finance investment spending as well as some consumption spending. c)Crowding out effect of monetary policy – As Expansionary policy leads to greater spending, the demand for money for transactions purposes (to buy products) increases, which may increase the interest rate which will crowd out private spending. d)All the above e)(a) and (b) onlyAccording to Keynesian analysis; the proper government response to a recession is _________,whereas an Austrian would support __________.A)expansionary fiscal/monetary policy; laissez-faireB)the implemention of a corporatist bailout of insolvent firms; raising taxesC)expansionary fiscal policy; expansionary monetary policyD)increasing government spending; increasing the legal powers of the central bank to deal withthe crisisWhen there is a problem of a delay in terms of implementation of the fiscal policy, that would be categorized as _____. execution lag information lag decision lag Fiscal policy nowadays are focused on eliminating GDP gap True False When the Central Bank controls the money supply by controlling the amount of high-powered money in the economy, that is called _____. interest rate fixation selective credit control open market operations required reserves ratio policy The focus of monetary policy nowadays is by using interest rate as an indicator. True False
- The Recognition Lag a)Is significant for both fiscal and monetary policy b) Is significant for fisca policy, but not so for monetary policy c)Is significant for monetary policy but not for fiscal policy d)Is insignificant for both fiscal and monetary policyThe Keynesian model suggests that .... should be preferred over .... since the ..... is larger than the ..... a. fiscal policy / monetary policy / unplanned changes in inventories / marginal propensity to consume. b. fiscal policy / monetary policy / impact of money supply / marginal propensity to consume. c. government sprending / tax cuts / tax multiplier / government-spending multiplier. d. government sprending / tax cuts / government-spending multiplier / tax multiplier. e. monetary policy / fiscal policy / impact of money supply / marginal propensity to consume.Fiscal policy to solve short-run economic problems supports the Keynesian notion of A. there being no government role in the economy. B. an active government role in the economy. C. achieving a command and control economy. D. the long-run nature of the economy.
- "Fine-tuning" the economy (a) Has worked to keep the economy stable ever since we discovered Keynesian policy (b) Is difficult to accomplish with discretionary macroeconomic policy because the time lags involved in economists recognizing the economy changed direction, policy makers devising and implementing appropriate policies, and the policies impacting the economy are longer than the average recession. (c) Might work better were we to strengthen and enact more automatic stabilizers. (d) All the above (e) (b) and (c) are correctThe rational expectations theory suggests that as the public learns more about the effects of fiscal and monetary policy, in the pursuit of their own self interest they take actions that make Group of answer choices monetary policy more powerful than fiscal policy. fiscal policy more powerful than monetary policy. fiscal and monetary policy ineffective in achieving their stated aims. fiscal and monetary policy effective in achieving their stated aims.To affect the level of potential output, the monetary policy and fiscal policy must Question 1 options: alter short-run aggregate supply. alter short run aggregate demand. affect investment that accelerates capital accumulation. none of the above.
- The Keynesian economic framework is based on an assumption that: A) an increase in government spending will cause the aggregate demand curve to shift to the left. B) people can afford a high level of government services. C) prices and wages are sticky and do not adjust rapidly. D) an increase in government spending will cause the aggregate demand curve to shift to the left.Which of the following is incorrectly classified as an expenditure reducing policy?Select one:a. Using Fiscal policyb. Invest money into education of future workforcec. Training to improve quality of workforced. Using Monetary policye. Revaluing the exchange rateoptions: a contractionary fiscal a contractionary monetary a recessionary an expansionary fiscal an expansionary monetary an inflationary equal to greater than grew inflation less than receded the same as unemployment
