Q7. What is the Keynesian prescription for inflation?( Pick 1 letter)A. Keynesians prescribe decreasing aggregate demand through increased government spendingB. Keynesians prescribe decreasing aggregate demand through fiscal restraintC. Keynesians prescribe increasing aggregate demand through fiscal restraint10. comatesnicsto searchQuestion 10Price Level220210200Potential GDPAS1901801701601501401301201100 1000 2000 3000 4000 5000 6000 7000 8000 900010000Real GDP (billions of $)ADThe graph above shows:O A. An recessionary gap equal to 1,000 billionOB. A recessionary gap equal to 6,000 billionOC. An inflationary gap equal to 6,000 billionD. An inflationary gap equal to 1,000 billionF:A Moving to another question will save this response.

Keynesian economics is an economic theory that emphasizes the role of government intervention in the…

Q7. What is the Keynesian prescription for inflation? ( Pick 1 letter) A. Keynesians prescribe decreasing aggregate demand through increased government spending B. Keynesians prescribe decreasing aggregate demand through fiscal restraint C. Keynesians prescribe increasing aggregate demand through fiscal restraint 10.

Q7. What is the Keynesian prescription for inflation? ( Pick 1 letter) A. Keynesians prescribe decreasing aggregate demand through increased government spending B. Keynesians prescribe decreasing aggregate demand through fiscal restraint C. Keynesians prescribe increasing aggregate demand through fiscal restraint 10.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

ChapterD: The Expenditure-output Model

Section: Chapter Questions

Problem 24CTQ: Exercise D24 Compare two policies: a tax cut on income or an increase in government spending on...

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Exercise D24 Compare two policies: a tax cut on income or an increase in government spending on roads and bridges. What are both the short-term and longâ€”term impacts of such policies on the economy?
(d) Suppose government spending increases by some amount AGo to become Go+AGo. Show the change in Y and C as a response to this increase in spending.
Consider the following NIPA data for 1Q2021 (First Quarter 20210 $ billlion) Investment: Non Residential $2,948.3 Exports $2,305.3 PCE Goods $5,183.5 Investment: Residential $1,043.7 Government Expendiures Federal $1,557.0 PCE Services $9,857.7 Imports $3,152.3 Governemnt Expenditures : State and local Goernent Expenditures $2,395.9 Change in private inventories -$90.1 2a. Compute the weights of each of PCE, GPDI, NX and GOV) in GDP 2b. Consider the following rates of change (%) for each of the above items. % change PCE 10.70% GPDI -5.00% NX -6.80% GOV 6.30%
Hi this question is for macroeconomics but on bartleby does not show any option for macroeconomics As a result of COVID-19, the Government of Canada has been actively using a discretionary fiscal stimulus policy. Using the Aggregate Supply – Aggregate Demand model, illustrate the intended impact of this policy on Aggregate Demand. Has the fiscal stimulus policy been effective? Why or why not? When the discretionary fiscal stimulus policy has ended, what actions with respect to the budget, will the government have to consider to address the debt level resulting from the discretionary fiscal stimulus policy?
Macroeconomics: An economy is experiencing a high rate of inflation. The government wants to reduce consumption by $36 billion to reduce inflationary pressure. The MPC is 0.75. By how much should the government raise taxes to achieve its objective? A. $6 billionB. $12 billionC. $16 billionD. $9 billion
2. In macroeconomic theory, total or aggregate spending is denoted by A and total or aggregateproduction of income by Y. Which one of the following statements is incorrect? A When A is greater than Y, there is disequilibrium and Y will tend to increase.B When A is equal to Y, there is equilibrium and Y will remain unchanged.C When A is less than Y, there is disequilibrium and Y will decrease.D When A is greater than Y, there is disequilibrium and A will decrease.
4. Assume the following model of the expenditure sector: AD=C+I+G+NX C = 420 + (4/5)YD YD=Y–TA+TR TA = (1/6)Y TRo = 100 Io = 160 Go = 180 NXo =–40 b) Assume we want to reach Y* = 2700 by changing government transfer payments (TR) instead. By how much should TR be changed?
Create three diagrams for the aggregate expenditures (AE) model for a public closed economy by adding different taxes. For the Diagram #1 suppose: Autonomous Expenditures: $6000; MPC: 0.75 Taxes: $1500;Potential Output: $16500For the Diagram #2 suppose: Autonomous Expenditures: $ 6000; MPC: 0.75;Taxes: $3000;Potential Output: $16500For the Diagram #3 suppose: Autonomous Expenditures: $6000; MPC: 0.75; Taxes: $2500Potential Output: $16500Explain each diagram by determining economic gaps and/or equilibriums. How does an increase in taxes affect GDP? How does a decrease in taxes affect GDP?
Given: C = 250 + 0.8 Y I = 150 G = 300 TR = 100 NX = 100 t =0.25 i) Find the equilibrium level of income. ii) Suppose, because of current COVID-19 situation C falls to 50, MPS falls to .05, I falls to 10, G falls to 100 and NX falls to 10. How much TR should the government increase to have the same level of equilibrium income as in part i)? iii) In determining the required change in TR in part ii), which multiplier did you use and why? (Hint: keep in mind the consumption tendency households may have under the COVID 19 situation in selecting the multiplier). iv) Draw a graph to show the appropriate changes between part i) and part ii). v) Give an example related to current Bangladeshi situation where the government may follow a 'Transfer Promoting Policy' instead of a 'Growth Promoting Policy' in determining who gets the transfer payment. vi) Instead of paying transfer (TR) if the government were to increase government spending (G), what type of crowding out would you expect? Briefly…
4. A country’s consumer spending is defined by the following equation:Consumer spending = 365 + 0.75 (Disposable Income)a. Draw a diagram to represent this equation. b. Assuming no government, what will the Marginal Propensity to Save (MPS) in this country.c. What will be Consumer spending if disposable income in this country is 1000? d. If suddenly this country’s wealth increases, how do you think the equation might change.Also show it in a diagram.
Which of the following statements about the economic fallout of the Covid-19 pandemic is false? O. Congress acted quickly and responded with unprecedented stimulus programs tohelp households and business that have been hurt because of the Covid-19 pandemic.O. The financing of fiscal stimulus packages significantly reduced the ability ofprivate sector firms to borrow in the loanable funds market.O. In the early months of the Covid-19 pandemic, unemployment agencies wereunequipped to handle the large volume of insurance claims.O. Millions of people have become unemployed because of the Covid-19 pandemic.
For an economy the following functions have been given:C = 100 + 0.8YS = -100 + 0.2YI = 120 – 5rMs = 120Md = 0.2Y – 5rCalculate the following:5.1.1. IS equation 5.1.2. LM equation 5.1.3. Equilibrium level of income 5.1.4. Equilibrium level of interest rate. 5.1.5 Calculate National saving. 5.1.6 Calculate money demand 5.1.7 Find consumption