please answer the following question: 1. Expansionary policies are government policies that: A) Increase Aggregate Demand B) Decrease Aggregate Demand C) Decrease Aggregate Supply
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please answer the following question:
1. Expansionary policies are government policies that:
A) Increase Aggregate
B) Decrease Aggregate Demand
C) Decrease
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- The task I am struggling with: In each of the following cases, either a recessionary or an inflationary gap exists. Assume that the aggregate supply curve is horizontal, so that the change in real GDP arising from a shift of the aggregate demand curve equals the size of the shift of the curve. Calculate both the change in government purchases of goods and services and the change in government transfers necessary to close the gap. a) Real GDP equals $100 billion, potential output equals $160 billion, and the marginal propensity to consume is 0.75. b) Real GDP equals $250 billion, potential output equals $200 billion, and the marginal propensity to consume is 0.5. c) Real GDP equals $180 billion, potential output equals $100 billion, and the marginal propensity to consume is 0.8 Thank you very much for your help.Explain why increased government spending of, for example, $15 billion, will have a different impact on aggregate demand than a $15 billion tax cut.QUESTION 3 Match the following terms with their definitions. Recognition Lag Policy Lag Implementation Lag Impact Lag Discretionary Macroeconomic Policy Automatic Stabilizers Fiscal Policy…
- Tax cuts shift aggregate demand A. right as do increases in government spending. B. left while increases in government spending shift aggregate demand right. C. left as do increases in government spending. D. right while increases in government spending shift aggregate demand left.Economists at which of the following government offices help formulate spending plans and regulatory policies? Office of Management and Budget Congressional Budget Office Department of the Treasury The Federal ReserveDefine the following: -Inside lag -Outside lag Which has the longer lag-monetary or fiscal policy? Which has the longer outside lag? Give reasons for your answer?
- As you have learned in Unit 8 (this week), monetary and fiscal policy play important roles in economic stimulation and or stabilization. In this regard: Start with a brief introduction that explains use of Government policy to control the economy. When is it appropriate to use monetary and fiscal policy to stimulate or stabilize the economy? Look at both. When is it inappropriate to use monetary and fiscal policy to stimulate or stabilize the economy? Look at both. What specific fiscal policy tools would you use to stimulate aggregate demand and how? What specific monetary policy tools would you use to stimulate aggregate demand and how? What is your conclusion, should policymakers use the monetary and or fiscal policy, or a combination of both, to stimulate aggregate demand? Explain your reasoning.Need help with this. THanks -When Government Spending increases by $10 B Aggregate Demand increases by MORE than $10 B. Which part of Aggregate Demand (C, I, G, or X?) increases so as to make this ripple effect, or multiplied impact, happen?Examine the following policies and determine which would decrease the level of aggregate demand. Decreasing in government spending and decreasing taxes Increasing investment and increasing government spending Increasing consumption and decreasing taxes Decreasing in government spending and increasing in taxes
- Which of the following economic schools of thought promote the use of fiscal policies to stimulate spending during periods of recession * Monetarists Keynesians Classical Supply-side economicsWhy tax cuts can increase both aggregate demand and aggregate supply?A stimulative monetary or fiscal action should increase aggregate demand. What factors may limit the actual increase in aggregate demand?
