Which of the following statements about Fiscal Policy is INCORRECT?  (a) In order to combat inflation, the South African Reserve Bank must apply a contractionary fiscal policy; (b) A contractionary fiscal policy can result in higher levels of unemployment; (c) Expansionary fiscal policy will increase the budget deficit; (d) The application of fiscal policy will have no effect on aggregate supply in the AD‐AS model.

Question

Which of the following statements about Fiscal Policy is INCORRECT? 

(a) In order to combat inflation, the South African Reserve Bank must apply a
contractionary fiscal policy;
(b) A contractionary fiscal policy can result in higher levels of unemployment;
(c) Expansionary fiscal policy will increase the budget deficit;
(d) The application of fiscal policy will have no effect on aggregate supply in the
AD‐AS model.

Expert Answer

Want to see the step-by-step answer?

Check out a sample Q&A here.

Want to see this answer and more?

Experts are waiting 24/7 to provide step-by-step solutions in as fast as 30 minutes!*

*Response times may vary by subject and question complexity. Median response time is 34 minutes for paid subscribers and may be longer for promotional offers.
Tagged in
Business
Economics

Fiscal Policy

Government Debt and Budget Deficit

Related Economics Q&A

Find answers to questions asked by students like you.

Q: 12. In the nation of Transporta, the income elasticity of demand for used cars is -2.66. So when inc...

A: 12. Option A Income Elasticity of Demand = % Change in Quantity Demanded / % Change in Income Pluggi...

Q: a) What is the equilibrium wage rate and equilibrium level of employment? A. $15 and 35 units of la...

A: Perfect competition refers to the situation where there are large number of prouder and consumers ar...

Q: We have export and import data of a country for the last two years.  In addition, let's assume that ...

A: According to the comparative advantage, the country produces only those good which have lower opport...

Q: In the market for running shoes, all the firms face a similar demand curve and have similar cost cur...

A: Answer - "Thank you for submitting the question but we are authorized to solve 3 sub- parts of the q...

Q: Demand Equation: QX = 30 - 2.PXInverse Supply Equation: In an economy with PX = (QX / 2) - 5, answer...

A: We have the following information- Demand Equation: QX = 30 - 2.PX Inverse Supply Equation:  PX = ...

Q: Describe your experience with price elasticity as a consumer. Provide an example of an inelastic goo...

A: In simple terms , price elasticity means percentage change in quantity demanded due to percentage ch...

Q: Consider the daily market for hot dogs in a small city. Suppose that this market is in long-run comp...

A: For the equilibrium price & quantity under perfect competition:

Q: Explain, with the aid of a graph, the demand‐pull inflation. In your answer, consider the following:...

A: Click to see the answer

Q: Question attahed in image

A: Answer - Given in the question -

Q: Price per Ice-cream (Rs.) Demand for Ice cream (Qd) Supply for Ice cream (Qs)140 500 1500120 750 120...

A: As per guidelines, we will answer the first three subpart question.

Q: Would the imposition of a price ceiling for mask due to covid 12 be an effective solution to the sho...

A: In economics, the price of a given product is determined at a point where demand and supply are equa...

Q: If the central bank decreases the amount of reserves banks are required to hold from 20% to 10%, the...

A: In a market, the fluctuation in money is managed by the central bank, and it has rights to make chan...

Q: Can inflation can only be controlled by increasing productivity?

A: Inflation refers to the continuous increase in general price level in the economy.

Q: onsider a short run production function q = cL+K where the value for c =: sing L units of labour and...

A: Returns to scale measures the proportionate change in output if all inputs are changed by the same f...

Q: Calculate the four components of aggregate expenditure and GDP for the following economy using data ...

A: GDP = C + I + G + NX where C = Consumption expenditure I = Investment G = Government spending NX = N...

Q: Illustrate and explain the impact of a minimum wage on the labour market.

A: In a competitive labour market, the equilibrium wage is determined by intersecting labour demand and...

Q: Calculate the consumers' surplus at the indicated unit price p for the demand equation. HINT [See Ex...

A: Consumer surplus refer to the area under the demand curve which is the difference between what a con...

Q: Table: Utility for Terri and Mary Income Terri'sMarginal Utilityfrom Income Maty'sMarginal Utilit...

A: Risk aversion is a concept where the individual gains less marginal utility from additional income b...

Q: Colonizers were more likely to ____  the power of government if they intended a long-term stay in th...

A: Hi, thanks for the question. As per the guideline we are allowed to attempt the first question. If y...

Q: Use the information in the table below to answer the questions that follow.Tax rates for individuals...

A: Tax refers to the compulsory charges levied by the government on its citizen and the citizen. The ta...

Q: C                      I                         G                               NX              Pri...

A: Nominal GDP = C + I + G + NX Nominal GDP in the year 1 = 1000 + 156 + 560 +52                       ...

Q: Demand Equation: QX = 30 - 2.PXInverse Supply Equation: In an economy with PX = (QX / 2) - 5, answer...

A: Demand(dd) shows a negative relationship between the price(P) and the quantity demanded(QD) i.e. whe...

Q: 40. A firm's shutdown point is the output and price at which the firm's total revenue just equals it...

A: 40. False The firm's shutdown point occurs at output and price where Price per unit (Average Revenue...

Q: Solve (d) parts onlys.  Q) In the country of Kwaki, people fish for salmon and grow corn. In one yea...

A: Gross domestic product (GDP) refers to the total value of all the final goods and services that prod...

Q: a. List three factors that will shift the demand curve for sugar and three factors that will shift t...

A: Three factors that can shift the demand curve of the sugar are: 1. Price of the related goods - Pric...

Q: Assume that Germany has 1200 units of labor available and it can produce two goods: apples and banan...

A: Click to see the answer

Q: (a) Why does the labour demand curve slope downwards?

A: Hello, thank you for the question. Since there are multiple questions asked here, only the first que...

Q: Q6 When consumers face rising gasoline prices, they typically reduce their quantity demanded mor...

A: The law of demand states that if the price increases when other things remain the same, it will lead...

Q: 1. Suppose the total cost to a firm of producing a quantity q of some commodity is C(4) - 490 + 20g ...

A: a) The marginal cost of the firm can be calculated through the derivation of the cost function with ...

Q: problem, assume it is not possible to buy a fraction of a burrito, and always round down to the near...

A: The price of each burrito is $2. Therefore, to find the no. of burritos that can be bought with $700...

Q: If a 10 percent change in the price of a good leads to a 5 percent change in the quantity supplied, ...

A: Price elasticity of demand is a measure of the change in the quantity demanded of a good in relation...

Q: Over the past 100 years, in the United States the average growth rate of, grew at a faster rate than...

A: Gross domestic product (GDP) refers to the total value of all the final goods and services that prod...

Q: Which of the following give the nominal value of a variable? Check all that apply. Maria's wage is $...

A: The main distinction b/w the nominal variables and real variables is that the former is defined in m...

Q: Let’s assume that a country in the Caribbean reports the following labour statistical data to its ci...

A: a) Unemployment rate = [Person unemployed / Total labor force]*100                                  ...

Q: 1) Large current account deficits imply large financial account surpluses. True Or False?Explain.

A: The current account deficit implies that the value of product and services a country imports exceeds...

Q: In Macroland, a country that operates according to Okun's law, potential GDP equals $10 trillion, th...

A: We have the following information- Potential GDP (P*) = $10 trillion Actual Rate of unemployment (U...

Q: 32. A decrease in the price of a fixed factor of production decreases total cost and A. decreases ...

A: (32) A decrease in the price of a fixed factor of production decreases total cost and A. decreases...