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What would happen on the a AS-AD. model if the government put forward and passed a tool $2 trillion infrastructure plan
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- Japan has had been in recession for decades despite having zero interest rates. Using the AD/SRAS/LRAS model, explain why they have been pursuing expansionary fiscal policies during the pandemic.For each of the following situations, describe how (if atall) the IS, MP, and AD curves are affected.a. A decrease in financial frictionsb. An increase in taxes and an autonomous easing ofmonetary policyarrow_forward Question Asked Aug 18, 2020 25 views Consider the following model of an economy operating with fixed wages, prices and interest rates and hasexcess capacity. Adsume all figures are I Zambian kwacha. C=100+0.8yd, T=100+25Y, G=980 and I= 500 Where c is consumption, yd is disposable income, T is taxes net of transformers, G is government spending on goods and services and I is investments. Is the government running a surplus or deficit Show the impact of a reduction in government spending by 80 on the equilibrium level of national income Illustrate your new equilibrium in the same Keynesian cross diagram
- Suppose an economy is hit by a recession and people’s income fall. a) Show graphically using AD-AS model how the price level and output are affected in the short-run. b) Can the government use fiscal policy to offset the effects on both price level and output simultaneously, explain? Answer Must be correct . Do all step. Don,t copy from anywhere.The outbreak of COVID-19 pandemic in 2020-21 has had a significant impact on the Australian economy. a) What is the the short-run equilibrium impact on inflation and output of the lockdown that governments imposed? Explain using the AS-AD model with graphs The Australian government implemented fiscal stimulus aimed at supporting households and businesses. b) Describe the key elements of the fiscal stimulus.What is the relative importance of government spending (G) in aggreagte demand and some factors that affect it?
- If inflation rises unexpectedly by 5, would a state government that had recently borrowed money to pay for a new highway benefit or lose?c = 400 + .60yd I = 200 Ytarget = 1875 a. calculate equilibrium disposable income for the one and two sector models b. calcualte the multipler c. what levels of government spending would be necessary to achieve the target level of income?example of one fiscal policy in our current econmy to assure US economic goals (2022)
- why did many government introduce "austerity" policies after the 2008/2009 financial crisis eventhough their economies were exhibiting recessionary GDP gaps and unemployment was high, and despite the fact that keynesian economics suggested that governments should do the opposite please help ASAP thankyou :DAssuming there is no trade, if the Marginal Propensity to Consume is 0.90 and the gov increase spend1ng by $5 bil1ion, how much will output rise?What are the central problems of the economy give atleast three..