Specify whether expansionary or contractionary fiscal policy would seem to be most appropriate in response to each of the situations below and sketch a diagram using aggregate demand and aggregate supply curves to illustrate your answer: e. A rise in the natural rate of unemployment. f. A rise in oil prices.

Q: Is expansionary fiscal policy more attractive to politicians who believe in larger government or to…

A: The fiscal policy is the policy of the government regarding the taxation and the government…

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: If the objective of fiscal policy is to stabilize (achieve full-employment (potential) GDP and…

A: A balanced budget is a circumstance in monetary planning or the budgeting technique where total…

Q: Explain the concept of Fiscal Policy

A: Definition of Fiscal Policy: Fiscal policy is a policy of government to control the economy through…

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: Give a brief definition of fiscal policy?  What are its economic goals?    Fiscal policy is the use…

A: Answer: Definition of fiscal policy: Fiscal policy is a policy of government wherein the government…

Q: What would happen if contractionary fiscal policy were implemented during an economic boom but,due…

A: The fiscal policy is a policy of the government which includes instruments namely taxes, government…

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

A: Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…

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: Under what conditions is expansionary fiscal policy the most effective at increasing output? Why?

A: Expansionary fiscal policy is the policy which is to be used to push back the equilibrium normal…

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: Council Economic Advisers (CEA)

A: The Council Economic Advisers[CEA] consist of three members. The Chairperson, who is appointed by…

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: 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: Explain how automatic stabilizers work, both on the taxation side and on the spending side, first in…

A: Automatic stabilizers are economic parameters that act automatically to counter the fluctuations in…

Q: Explain the Expansionary and Contactionary Fiscal Policy with the help of diagram.

A: Fiscal policy is used by the central government of the country or finance ministry of the country to…

Q: Describe the shortcomings of Fiscal Policy. Be as thorough as possible.

A: Fiscal policy is the one where government changes its spending and tax policies in order to achieve…

Q: Classify each statement based on the type of fiscal policy to which it refers. Expansionary fiscal…

A: The fiscal policy action that is used by the government to increase the aggregate demand is known as…

Q: Right now many economies in the world are experiencing a downturn due to the Corona Virus. a) What…

A: Hello, thank you for the question. Since there are multiple subpart questions posted here, only the…

Q: Which one of the following statements regarding fiscal policy and the budget is (2) correct?  A…

A: Fiscal policy is the use of government spending and taxes to influence the level of money supply in…

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: 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: If inflation is a major issue in the economy, what would be the correct fiscal policy response from…

A: Fiscal policy refers to changes or adjustments in the expenditure(spending) and/or the taxes so as…

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: Explain how expansionary fiscal policy works in an economy

A: The fiscal policy is the use of government revenue (taxes or tax cut) and the government…

Q: Our federal government establishes a budget that determines what programs and services can be…

A: Answer- Need to find- Our federal government establishes a budget that determines what programs and…

Q: Some Economists argue that Fiscal policy have no effects in the long run on employment and aggregate…

A: There are various responsibilities of government and central bank towards the economy. The overall…

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: List and briefly explain the time lags involved in discretionary fiscal policy.

A: Discretionary fiscal policy implies the public authority makes changes to taxation rates as well as…

Q: Explain the 3 types of lag we should be concerned about when implementing fiscal policy?

A: When a policy is implemented there are certain lags due to the difference in the period when the…

Q: Describe the supply-side effects of a fiscal stimulus and explain how a tax cut will influence…

A: The supply-side effects of fiscal-stimulus: Fiscal-stimulus can be given in the form of higher…

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: By using graphs, show and explain the effects of an expansionary fiscal policy on the goods market…

A: Expansionary fiscal policy is defined as how the government initiates with spending more and even…

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

A: Expansionary Policy: Expansionary monetary arrangement incorporates tax breaks, move installments,…

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: Answer the questions below. a, Discuss why the aggregate supply (AS) curve is relatively flat within…

A: a) When the aggregate output lies in the low range, it implies that the economy has a large amount…

Q: Assume the economy has entered a recession. Identify two fiscal policy actions that could be used to…

A: The recession would result in the fall in the output and the fall in the GDP . The recession would…

Q: Outline the supply-side view of fiscal policy. How does this view differ from the various…

A: In the Supply- side view, the output of the economy is stimulated to increase by increasing the…