Question 17 According to Classical Economics, the macro economy O faces recession when Aggregate Expenditures decrease. is self-correcting O faces higher interest rates each year. O needs fiscal policy to get to full employment.
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- a.) Explain how the Aggregate Demand - Aggregate Supply Model differs from the Aggregate Expenditures model Put the two models side by side, look for the differences and explain them.Only typed answer and please don't use chatgpt Why will temporary tax increase be insignificant in reducing consumption expenditures by the amount expected a. Because viewed the tax increase as permanent. b. Because people choose to increase their savings. C become people viewed taco increases temporarily d. Consumption expenditure are not related to level of taxtationGive typed solution only assume an economy has an MPC of .5 and their full employment level of output is $500 billion. If their current GDP is $600 billion, what could their government do to try ans correct this? a) decrease taxes by $50 billion b) decrease government spending by $50 billion c) increase government spending by $50 billion d) increase taxes by $50 billion
- In October 2016, the Malaysian Prime Minister, Datuk Seri Najib Tun Razak tabledout Bajet 2017 in which certain actions will be undertaken to strengthen the state of theeconomy. Also, in 2016, Malaysia’s fiscal budget deficit stood at approximately 3.1% ofthe country’s gross domestic product (GDP).i. Provide two (2) real examples of how the Malaysian governmentimplements fiscal policy as announced in Bajet 2017.(6 marks)iii. Using an AD-AS graph to represent the macroeconomy, explain how oneof the actions of Bajet 2017 aim to stimulate aggregate demand and bringthe economy from a state of ‘recessionary gap’ back to potential GDPWhat will be the effect of “contractionary fiscal policy of home” on net export, saving and interest rate? Show your answer with the help of graph and also properly explainThe country is experiencing a serious rise in inflation which the government wants to control through fiscal policy. The Government will decrease spending by $20 million and increase taxes by $15 million. The marginal propensity to consume (MPC) is 0.80. What will be the effect on GDP and by how much? A recessionary gap is how much GDP needs to increase from the current GDP to achieve full employment. Let's say that we are experiencing a recessionary gap of $36 million. Also assume that the MPC equals .80. The government decides to decrease taxes to close the recessionary gap. How much will be the tax decrease? An inflationary gap is how much GDP needs to decrease from the current GDP to maintain employment while avoiding inflation. Let's say that we are experiencing an inflationary gap of $200 million. The government decides to increase taxes. Assume the MPC equals .80. How much will the tax increase be? The government wants to achieve a balanced budget. It therefore increases…
- 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?Suppose that due ot a fiscal stimulus, there is an increase in disposable incomes of $100 billion in the first round. Then, $33 billion was spent in consumption from this initial change of the disposable incomes. Following the same marginal propensity to consume, how much is the change in consumption spending in the next round from the $33 billion?describe the anticipated impacts of the Biden Covid Bill. Remember, the focus is only on one side of the equation: is it Agg. Demand or Agg Supply? Please be specific with provisions in the bill and anticipated impacts on the economy (affecting C, G, Net X or I).
- I and T are fixed (I=Io and T=to), so we know that if households attempt to save more, cet. par., Private saving will rise and the government budget deficit (GBD) will fall. Private saving will fall and the GBD will rise. Private saving will not change, but the GBD will rise. none of the above Provide appropriate name(s) and explain using I=sum of Saving.Only typed answer Assume that marginal propensity to consume is 0.8 and full-employment level of output is $800 billion. If the actual real GDP is $700 billion, find the change in lump-sum taxes that would bring the economy back to its full-employment level of output (assume taxes and transfer payments do not depend on income and the economy is a closed economy).Only typed answer and don't use chat gpt The government can use _____________ in the form of ____________________ to increase the level of aggregate demand in the economy. A.) expansionary fiscal policy; an increase in corporate taxes B.) contractionary fiscal policy; a reduction in taxes C.) contractionary fiscal policy; an increase in taxes D.) expansionary fiscal policy; an increase in government spending
