Which of the following policies will shift the IS curve to the right a) An increase in the equilibrium level of income y* b) the central bank buys public debt c) an increase in government spending d) All of the choice are correct
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Which of the following policies will shift the IS curve to the right
a) An increase in the equilibrium level of income y*
b) the central bank buys public debt
c) an increase in government spending
d) All of the choice are correct
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- If the MPC in an economy is .6, the government could shift the aggregate demand curve to the right by $50 billion by: reducing worthless government expenditures by $125 billion. reducing worthless government expenditures by $20 billion. increasing taxes by $50 billion. increasing worthless government expenditures by $20 billion. None of the available are correctConsider a Keynesian model but where investment (just like consumption) is increasing in aggregate income, e.g., because investment depends on business cash flow. Now that investment depends on aggregate income, a fiscal stimulus has more effect on equilibrium output.Answer true, false, or uncertain. Please briefly explain your answerA drop in the price level will have what effect in the aggregate demand model and the income-expenditure model?A.decreases aggregate demand and planned expenditures.B.increases aggregate demand, but decreases planned expenditures.C.decreases aggregate quantity demanded, but increases planned expenditures.D.increases aggregate quantity demanded and planned expenditures.
- John Maynard Keynes created the aggregate expenditures model based primarily on what historical event? Bank panic of 1907. Great Depression. Spectacular economic growth during World War II. The economic expansion of the 1920s. None of the available answers are correct.Which of the following scenarios is an example of a recognition lag? The economy: a)enters a deep recession on the same day that new quarterly data show positive economic growth. b)enters a deep recession, and parliament takes two months to approve an extensive tax-cut bill.b) c)enters a deep recession, and parliament passes spending bills for public works projects that will take years to plan and build. Which of the following scenarios is an example of an administrative lag? a)Policy makers obtain relevant economic data months after a recession has already begun. b)A new law requires that all new spending bills go through at least one month of debate before receiving a parliament vote. c)In response to a recession, parliament passes a spending bill for motorway upgrades that will take years to plan and complete Government financing of deficit spending can offset the deficit's expansionary effect if government borrowing increases interest…If the MPC in an economy is .8, the increase in real GDP can occur (aggregate demand curve can shift rightward) by $100 billion by doing which of the following: Group of answer choices increasing government spending by $80 billion. increasing government spending by $25 billion. increasing government spending by $20 billion increasing taxes by $25 billion.
- The task I am struggling with: In each of the following cases, either a recessionary or an inflationary gap exists. Assume that the aggregate supply curve is horizontal, so that the change in real GDP arising from a shift of the aggregate demand curve equals the size of the shift of the curve. Calculate both the change in government purchases of goods and services and the change in government transfers necessary to close the gap. a) Real GDP equals $100 billion, potential output equals $160 billion, and the marginal propensity to consume is 0.75. b) Real GDP equals $250 billion, potential output equals $200 billion, and the marginal propensity to consume is 0.5. c) Real GDP equals $180 billion, potential output equals $100 billion, and the marginal propensity to consume is 0.8 Thank you very much for your help.Which of the following would be a fiscal policy prescription for ending inflation? A) Raise taxes B) Increase government expenditures to let the multiplier work C) Raise interest rates to stimulate saving D) Promote exports to increase injections in the domestic economyIf the MPC in an economy is 0.6, government could shift the aggregate demand curve rightward by $30 billion by Multiple Choice decreasing taxes by $20 billion. increasing government spending by $20 billion. increasing government spending by $18 billion. decreasing taxes by $30 billion.
- Automatic stabilizers: A) counteract both recessions and expansions through changes in spending without government action. B) are government programs to employ workers during recessions. C) create government budget surpluses during economic recessions. D) are designed to reduce the price level directly.In the above figures, supposed that there is no import or proportional tax. To pull the economy back to the long-run equilibrium, the government can increase spending by $ trillion. 1) 1 2) 2 3) 8 4) 4Determine whether each of the following, other factors held constant, would, in the short run, lead to an increase, a decrease, or no change in the level of real GDP demanded: a. A decrease in government purchases b. An increase in net taxes c. A reduction in transfer payments d. A decrease in the marginal propensity to consume.