Which of the following is an appropriate discretionary (active) fiscal policy if there is a recessionary gap? Group of answer choices an increase in the supply of money an increase in government purchases approved by the US Congress a decrease in transfer payments an increase in individual income taxes

Q: If government policy makers were worried about the inflationary potential of the economy, which of…

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Q: effectiveness

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Q: Council Economic Advisers (CEA)

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Q: Which of the following statements about how fiscal policy should most appropriately be used in a…

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Q: Please show a diagram showing fiscal stimulus impacting on an economy where household saving is on…

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Q: Discuss two reasons why discretionary fiscal policy (expansionary & contractionary) may be…

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Q: Use the aggregate expenditures model to show how government fiscal policy could eliminate either a…

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Q: If  US economy moves into an expansion while producing more than potential GDP, then: a) government…

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Q: Explain the theory that crowding out can weaken or nullify the effect of expansionary fiscal policy…

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

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Q: What is meant by discretionary fiscal policy? Give an example of how the government can use fiscal…

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Q: Identify and describe some practical difficulties of discretionary fiscal policy and use examples…

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Q: discuss whether or not fiscal policy is an effective tool for the federal government when the…

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

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Q: Giving examples, outline the reasons for using a discretionary fiscal policy

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Fiscal Policy and Money Market

Fiscal policy is one of the important tools that is used by the government to control inflation or aggregate demand in the economy. Under this policy, there are two rules which are used by the government, one is the expenditure of the government and the other is the taxation or income of the government which it collects from the public.