Show and explain how an expansionary fiscal policy can cause crowding-out effect by using aggregate expenditure and aggregate output curves.

Q: Distinguish between automatic fiscal policy and discretionary fiscal policy. What type of fiscal…

A: Fiscal policy refers to the government policy regarding tax and government spending which stabilizes…

Q: How could the government deal with the crowding out effect generated from applying the expansionary…

A: Crowding out effect occurs when the increase in spendings or investment by the government crowds out…

Q: Specify whether expansionary or contractionary fiscal policy would seem to be most appropriate in…

A: Note: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question…

Q: Expresses in detail the effects of expansionary and contractionary fiscal policy on income and the…

A: In an economy, fiscal policies are implemented by the government to influence the aggregate demand…

Q: What is an expansionary gap? What fiscal policy might close that gap?

A: Answer: Introduction: Expansionary gap: when the actual output level exceeds the potential output…

Q: Based on your understanding of the multiplier effect and the crowding-out effects, do you think that…

A: The macroeconomic equilbrium in an economy occurs at the point where the aggregate demand in the…

Q: Will a discretionary fiscal policy action that involves spending $100 billion have the same overall…

A: The discretionary fiscal policy refers to changes in the tax rate or the level of government…

Q: One possible fiscal policy solution for a recessionary gap would be O to cut taxes. O to raise…

A: Fiscal policy is a policy used by the government to stabilize the economy from economic ups and down…

Q: Identify a change in fiscal policy that will shift the composition of output toward investment.…

A: When a contractionary fiscal policy is adopted, it reduces government spending and raises taxes,…

Q: What is the role of the Council Economic Advisers (CEA) as it relates to the effectiveness of the…

A: The Council Economic Advisor or CEA created as in the Employment act of 1946, assists and advice the…

Q: Define what is 'automatic stabiliser' in fiscal policy, and provide 2 examples

A: Meaning of Fiscal Policy: The term fiscal policy refers to the situation under which the…

Q: ontrast the effectiveness of fiscal policy in the BKM and AD-AS models.

A: The aggregate demand curve shows the inverse relationship between interest rate and the total…

Q: What is expansionary fiscal policy? What is contractionary fiscal policy? Does expansionary fiscal…

A: In Keynesian macroeconomic theory, aggregate demand plays a very major role in stabilizing the…

Q: Which of the following is an example of contractionary fiscal policy? A. Cutting spending B.…

A: Fiscal policies are managed/controlled by the government of the country whereas monetary policies…

Q: What are the three fiscal policy tools and how would each be used to counter a contractionary gap?

A: Fiscal policy tools are the revenue and expenditure tools of the government undertaken to accomplish…

Q: Discuss Expansionary Fiscal Policy. Who is responsible for implementing fiscal policy? What may be…

A: Policies are created by the government in order to keep the economy on track and ensure economic…

Q: A government spends $500,000 as an expansionary fiscal policy. The spending multipler is 2. a) if…

A: Changes in the price level, affects the spending multiplier.

Q: Explain how time lags present an additional problem in fiscal policy.

A: Fiscal policy is policy of expenditure and taxes. Fiscal policy is operated by the government. Lags…

Q: Discuss the challenges of predicting the effects of discretionary fiscal policy on aggregate…

A: fiscal policy refers to the policy of taxation and expenditures of government. Government makes…

Q: In which situation would it make the most sense to send stimulus checks as an exapansionary fiscal…

A: Answer: Correct option: b (Forced shut-downs of the economy due to a health pandemic lead to a…

Q: Why the aggregate supply (AS) curve is relatively flat within the low ranges of aggregate output and…

A: Aggregate supply refers to the total value of goods and services available for purchase at a…

Q: Explain each of the tools that exist in expansionary fiscal policy and contractionary fiscal policy.

A: Fiscal policy is the use of government spending and taxation to adjust the economy. It is a method…

Q: List what specific, deliberate actions the federal government could take to enact expansionary…

A: Expansionary fiscal policy is aimed at increasing aggregate demand when the economy is in a…

Q: and

A: Supply-side economics is theory postulating that tax cuts for the wealthy result in increased…

Q: To enact Contractionary Fiscal Policy, the federal government must be running a budget ___________.

A: Contractionary fiscal policy is the point at which the public authority either reduces spending or…

Q: How relevant is the multiplier concept to the implementation of expansionary and contractionary…

A: Spending multiplier: - it is a fraction that shows the magnitude of the change in national income…

Q: Derive and discuss the three major fiscal policy multipliers

A: Assuming an open economy where output is exactly equal to the sum of consumption expenditure,…

Q: Explain why implementation lag for fiscal policy is longer than monetary policy.

A: Fiscal Policy Monetary Policy The fiscal policy is the use of government revenue (taxes or tax…

Q: when can we say that fiscal policy succeeded and where/ when can we say that fiscal policy has…

A: Fiscal policy refers to the actions used by governments to stabilize the economy, particularly…

Q: What is fiscal policy and what is the crowding out effect of expansionary fiscal policy?

A: Government use various policy instruments in the economy to properly balance and maintain it and…

Q: a. A recession. b. A stock market collapse that hurts consumer and business confidence. c.…

A: * ANSWER :-  (a)

Q: Differentiate between the expansionary fiscal policy and contractionary fiscal policy with diagram…

A: Fiscal Policy: Fiscal policy is used to influence aggregate demand and maintain stability in the…

Q: What are the primary goals of expansionary and contractionary fiscal policies and their effects on…

A: Expansionary fiscal policy happens when the government decreases the tax rate or raises its…

Q: Why do Republicans like tax cuts? Why are tax cuts a good thing? How does it affect the aggregate…

A: Answer -  We can not generalise that Republicans like tax cut or not but long line of US presidents…

Q: What is classes as an expansionary fiscal policy?

A: Fiscal policy is the government-imposed policy used to change economic conditions like demand,…

Q: When television commentators refer to "tax and spend" policy, they are referring to O fiscal policy.…

A: A fiscal policy is a policy used by the government to stabilize the economy with taxes and…

Q: Describe how expansionary fiscal policy can fail during a recession.

A: Fiscal policy refers to the policy taken by the government to influence the economy of a nation. The…

Q: Explain how fiscal policy can be implemented if an economy is in the downswing of a business cycle.

A: Fiscal policy is tools available to the central government to mitigate the economic consequence by…

Q: What action could the TCMB take to reduce the crowding-out effect of an expansionary fiscal policy?

A: Expansionary fiscal policy involves increasing government spending or decreasing taxes, which…

Q: What issue or problem in the economy would be fixed with expansionary fiscal policy? Contractionary…

A: Expansionary-Fiscal policies are targeted towards increasing the consumption in the…

Q: Expansionary fiscal policy increases the government budget deficit. True, False, or Uncertain?…

A: Fiscal policies are the policies that are managed by the government with the aim of influencing…

Q: Explain how the implementation of this policy is related to the simple spending multiplier. Explain…

A: Fiscal policy is a branch of monetary policy where the government try to manage the or adjust the…