The impact of decrease in the government purchase on GDP. Concept Introduction: Fiscal Policy: Fiscal policy is the policy by which government regulates the nation’s economy by adjusting the government spending and controlling the tax rates. It tries to influence the demand side of the economy.

Question

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Answer 1

Question

Chapter 11, Problem 1.1P

Sub-part

A

To determine

The impact of decrease in the government purchase on GDP.

Concept Introduction:

Fiscal Policy: Fiscal policy is the policy by which government regulates the nation’s economy by adjusting the government spending and controlling the tax rates. It tries to influence the demand side of the economy.

Sub-part

A

Expert Solution

Explanation of Solution

Fiscal Policy: Fiscal policy is the policy by which government regulates the nation’s economy by adjusting the government spending and controlling the tax rates. It tries to influence the demand side of the economy.

A decrease in government purchases Decreases in government purchases will reduce the aggregate demand of the economy, thus controlling the inflation rate, but will have the reverse effect on GDP.

Sub-part

B

To determine

The impact of an increase in the net taxes on GDP.

Concept Introduction:

Fiscal Policy: Fiscal policy is the policy by which government regulates the nation’s economy by adjusting the government spending and controlling the tax rates. It tries to influence the demand side of the economy.

Sub-part

B

Expert Solution

Explanation of Solution

Fiscal Policy: Fiscal policy is the policy by which government regulates the nation’s economy by adjusting the government spending and controlling the tax rates. It tries to influence the demand side of the economy.

An increase in net taxes Increases in net taxes will reduce the disposable income of the people. This will reduce the aggregate demand as such reduce consumer spending, and thus have a negative impact on GDP.

Sub-part

C

To determine

The impact of reduction in transfer payments on GDP.

Concept Introduction:

Fiscal Policy: Fiscal policy is the policy by which government regulates the nation’s economy by adjusting the government spending and controlling the tax rates. It tries to influence the demand side of the economy.

Sub-part

C

Expert Solution

Explanation of Solution

Fiscal Policy: Fiscal policy is the policy by which government regulates the nation’s economy by adjusting the government spending and controlling the tax rates. It tries to influence the demand side of the economy.

A reduction in transfer payments Reduction in transfer payment will reduce consumer spending and thus will have a negative impact on GDP.

Sub-part

D

To determine

The impact of decrease in the marginal propensity to consume on GDP.

Concept Introduction:

Fiscal Policy: Fiscal policy is the policy by which government regulates the nation’s economy by adjusting the government spending and controlling the tax rates. It tries to influence the demand side of the economy.

Sub-part

D

Expert Solution

Explanation of Solution

Fiscal Policy: Fiscal policy is the policy by which government regulates the nation’s economy by adjusting the government spending and controlling the tax rates. It tries to influence the demand side of the economy.

A decrease in the marginal propensity to consumer A decrease in marginal propensity to consume implies an increase in the rate of savings and decrease in the rate of consumer spending. This implies the rate of consumption will reduce. This will decrease GDP.

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Answer 2

Question

Chapter 11, Problem 1.1P

Sub-part

A

To determine

The impact of decrease in the government purchase on GDP.

Concept Introduction:

Fiscal Policy: Fiscal policy is the policy by which government regulates the nation’s economy by adjusting the government spending and controlling the tax rates. It tries to influence the demand side of the economy.

Sub-part

A

Expert Solution

Explanation of Solution

Fiscal Policy: Fiscal policy is the policy by which government regulates the nation’s economy by adjusting the government spending and controlling the tax rates. It tries to influence the demand side of the economy.

A decrease in government purchases Decreases in government purchases will reduce the aggregate demand of the economy, thus controlling the inflation rate, but will have the reverse effect on GDP.

Sub-part

B

To determine

The impact of an increase in the net taxes on GDP.

Concept Introduction:

Fiscal Policy: Fiscal policy is the policy by which government regulates the nation’s economy by adjusting the government spending and controlling the tax rates. It tries to influence the demand side of the economy.

Sub-part

B

Expert Solution

Explanation of Solution

Fiscal Policy: Fiscal policy is the policy by which government regulates the nation’s economy by adjusting the government spending and controlling the tax rates. It tries to influence the demand side of the economy.

An increase in net taxes Increases in net taxes will reduce the disposable income of the people. This will reduce the aggregate demand as such reduce consumer spending, and thus have a negative impact on GDP.

Sub-part

C

To determine

The impact of reduction in transfer payments on GDP.

Concept Introduction:

Fiscal Policy: Fiscal policy is the policy by which government regulates the nation’s economy by adjusting the government spending and controlling the tax rates. It tries to influence the demand side of the economy.

Sub-part

C

Expert Solution

Explanation of Solution

Fiscal Policy: Fiscal policy is the policy by which government regulates the nation’s economy by adjusting the government spending and controlling the tax rates. It tries to influence the demand side of the economy.

A reduction in transfer payments Reduction in transfer payment will reduce consumer spending and thus will have a negative impact on GDP.

Sub-part

D

To determine

The impact of decrease in the marginal propensity to consume on GDP.

Concept Introduction:

Fiscal Policy: Fiscal policy is the policy by which government regulates the nation’s economy by adjusting the government spending and controlling the tax rates. It tries to influence the demand side of the economy.

Sub-part

D

Expert Solution

Explanation of Solution

Fiscal Policy: Fiscal policy is the policy by which government regulates the nation’s economy by adjusting the government spending and controlling the tax rates. It tries to influence the demand side of the economy.

A decrease in the marginal propensity to consumer A decrease in marginal propensity to consume implies an increase in the rate of savings and decrease in the rate of consumer spending. This implies the rate of consumption will reduce. This will decrease GDP.

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Answer 3

Question

Chapter 11, Problem 1.1P

Sub-part

A

To determine

The impact of decrease in the government purchase on GDP.

Concept Introduction:

Fiscal Policy: Fiscal policy is the policy by which government regulates the nation’s economy by adjusting the government spending and controlling the tax rates. It tries to influence the demand side of the economy.

Sub-part

A

Expert Solution

Explanation of Solution

Fiscal Policy: Fiscal policy is the policy by which government regulates the nation’s economy by adjusting the government spending and controlling the tax rates. It tries to influence the demand side of the economy.

A decrease in government purchases Decreases in government purchases will reduce the aggregate demand of the economy, thus controlling the inflation rate, but will have the reverse effect on GDP.

Sub-part

B

To determine

The impact of an increase in the net taxes on GDP.

Concept Introduction:

Fiscal Policy: Fiscal policy is the policy by which government regulates the nation’s economy by adjusting the government spending and controlling the tax rates. It tries to influence the demand side of the economy.

Sub-part

B

Expert Solution

Explanation of Solution

Fiscal Policy: Fiscal policy is the policy by which government regulates the nation’s economy by adjusting the government spending and controlling the tax rates. It tries to influence the demand side of the economy.

An increase in net taxes Increases in net taxes will reduce the disposable income of the people. This will reduce the aggregate demand as such reduce consumer spending, and thus have a negative impact on GDP.

Sub-part

C

To determine

The impact of reduction in transfer payments on GDP.

Concept Introduction:

Fiscal Policy: Fiscal policy is the policy by which government regulates the nation’s economy by adjusting the government spending and controlling the tax rates. It tries to influence the demand side of the economy.

Sub-part

C

Expert Solution

Explanation of Solution

Fiscal Policy: Fiscal policy is the policy by which government regulates the nation’s economy by adjusting the government spending and controlling the tax rates. It tries to influence the demand side of the economy.

A reduction in transfer payments Reduction in transfer payment will reduce consumer spending and thus will have a negative impact on GDP.

Sub-part

D

To determine

The impact of decrease in the marginal propensity to consume on GDP.

Concept Introduction:

Fiscal Policy: Fiscal policy is the policy by which government regulates the nation’s economy by adjusting the government spending and controlling the tax rates. It tries to influence the demand side of the economy.

Sub-part

D

Expert Solution

Explanation of Solution

Fiscal Policy: Fiscal policy is the policy by which government regulates the nation’s economy by adjusting the government spending and controlling the tax rates. It tries to influence the demand side of the economy.

A decrease in the marginal propensity to consumer A decrease in marginal propensity to consume implies an increase in the rate of savings and decrease in the rate of consumer spending. This implies the rate of consumption will reduce. This will decrease GDP.

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Answer 4

Question

Chapter 11, Problem 1.1P

Sub-part

A

To determine

The impact of decrease in the government purchase on GDP.

Concept Introduction:

Fiscal Policy: Fiscal policy is the policy by which government regulates the nation’s economy by adjusting the government spending and controlling the tax rates. It tries to influence the demand side of the economy.

Sub-part

A

Expert Solution

Explanation of Solution

Fiscal Policy: Fiscal policy is the policy by which government regulates the nation’s economy by adjusting the government spending and controlling the tax rates. It tries to influence the demand side of the economy.

A decrease in government purchases Decreases in government purchases will reduce the aggregate demand of the economy, thus controlling the inflation rate, but will have the reverse effect on GDP.

Sub-part

B

To determine

The impact of an increase in the net taxes on GDP.

Concept Introduction:

Fiscal Policy: Fiscal policy is the policy by which government regulates the nation’s economy by adjusting the government spending and controlling the tax rates. It tries to influence the demand side of the economy.

Sub-part

B

Expert Solution

Explanation of Solution

Fiscal Policy: Fiscal policy is the policy by which government regulates the nation’s economy by adjusting the government spending and controlling the tax rates. It tries to influence the demand side of the economy.

An increase in net taxes Increases in net taxes will reduce the disposable income of the people. This will reduce the aggregate demand as such reduce consumer spending, and thus have a negative impact on GDP.

Sub-part

C

To determine

The impact of reduction in transfer payments on GDP.

Concept Introduction:

Fiscal Policy: Fiscal policy is the policy by which government regulates the nation’s economy by adjusting the government spending and controlling the tax rates. It tries to influence the demand side of the economy.

Sub-part

C

Expert Solution

Explanation of Solution

Fiscal Policy: Fiscal policy is the policy by which government regulates the nation’s economy by adjusting the government spending and controlling the tax rates. It tries to influence the demand side of the economy.

A reduction in transfer payments Reduction in transfer payment will reduce consumer spending and thus will have a negative impact on GDP.

Sub-part

D

To determine

The impact of decrease in the marginal propensity to consume on GDP.

Concept Introduction:

Fiscal Policy: Fiscal policy is the policy by which government regulates the nation’s economy by adjusting the government spending and controlling the tax rates. It tries to influence the demand side of the economy.

Sub-part

D

Expert Solution

Explanation of Solution

Fiscal Policy: Fiscal policy is the policy by which government regulates the nation’s economy by adjusting the government spending and controlling the tax rates. It tries to influence the demand side of the economy.

A decrease in the marginal propensity to consumer A decrease in marginal propensity to consume implies an increase in the rate of savings and decrease in the rate of consumer spending. This implies the rate of consumption will reduce. This will decrease GDP.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 11, Problem 1.1P

Sub-part

A

To determine

The impact of decrease in the government purchase on GDP.

Concept Introduction:

Fiscal Policy: Fiscal policy is the policy by which government regulates the nation’s economy by adjusting the government spending and controlling the tax rates. It tries to influence the demand side of the economy.

Sub-part

A

Expert Solution

Explanation of Solution

Fiscal Policy: Fiscal policy is the policy by which government regulates the nation’s economy by adjusting the government spending and controlling the tax rates. It tries to influence the demand side of the economy.

A decrease in government purchases Decreases in government purchases will reduce the aggregate demand of the economy, thus controlling the inflation rate, but will have the reverse effect on GDP.

Sub-part

B

To determine

The impact of an increase in the net taxes on GDP.

Concept Introduction:

Fiscal Policy: Fiscal policy is the policy by which government regulates the nation’s economy by adjusting the government spending and controlling the tax rates. It tries to influence the demand side of the economy.

Sub-part

B

Expert Solution

Explanation of Solution

Fiscal Policy: Fiscal policy is the policy by which government regulates the nation’s economy by adjusting the government spending and controlling the tax rates. It tries to influence the demand side of the economy.

An increase in net taxes Increases in net taxes will reduce the disposable income of the people. This will reduce the aggregate demand as such reduce consumer spending, and thus have a negative impact on GDP.

Sub-part

C

To determine

The impact of reduction in transfer payments on GDP.

Concept Introduction:

Fiscal Policy: Fiscal policy is the policy by which government regulates the nation’s economy by adjusting the government spending and controlling the tax rates. It tries to influence the demand side of the economy.

Sub-part

C

Expert Solution

Explanation of Solution

Fiscal Policy: Fiscal policy is the policy by which government regulates the nation’s economy by adjusting the government spending and controlling the tax rates. It tries to influence the demand side of the economy.

A reduction in transfer payments Reduction in transfer payment will reduce consumer spending and thus will have a negative impact on GDP.

Sub-part

D

To determine

The impact of decrease in the marginal propensity to consume on GDP.

Concept Introduction:

Fiscal Policy: Fiscal policy is the policy by which government regulates the nation’s economy by adjusting the government spending and controlling the tax rates. It tries to influence the demand side of the economy.

Sub-part

D

Expert Solution

Explanation of Solution

Fiscal Policy: Fiscal policy is the policy by which government regulates the nation’s economy by adjusting the government spending and controlling the tax rates. It tries to influence the demand side of the economy.

A decrease in the marginal propensity to consumer A decrease in marginal propensity to consume implies an increase in the rate of savings and decrease in the rate of consumer spending. This implies the rate of consumption will reduce. This will decrease GDP.

Answer 6

Chapter 11, Problem 1.1P

Sub-part

A

To determine

The impact of decrease in the government purchase on GDP.

Concept Introduction:

Fiscal Policy: Fiscal policy is the policy by which government regulates the nation’s economy by adjusting the government spending and controlling the tax rates. It tries to influence the demand side of the economy.

Sub-part

A

Expert Solution

Explanation of Solution

Fiscal Policy: Fiscal policy is the policy by which government regulates the nation’s economy by adjusting the government spending and controlling the tax rates. It tries to influence the demand side of the economy.

A decrease in government purchases Decreases in government purchases will reduce the aggregate demand of the economy, thus controlling the inflation rate, but will have the reverse effect on GDP.

Answer 7

Chapter 11, Problem 1.1P

Sub-part

A

To determine

The impact of decrease in the government purchase on GDP.

Concept Introduction:

Fiscal Policy: Fiscal policy is the policy by which government regulates the nation’s economy by adjusting the government spending and controlling the tax rates. It tries to influence the demand side of the economy.

Answer 8

Sub-part

A

Expert Solution

Explanation of Solution

Fiscal Policy: Fiscal policy is the policy by which government regulates the nation’s economy by adjusting the government spending and controlling the tax rates. It tries to influence the demand side of the economy.

A decrease in government purchases Decreases in government purchases will reduce the aggregate demand of the economy, thus controlling the inflation rate, but will have the reverse effect on GDP.

Answer 9

Sub-part

A

Expert Solution

Answer 10

Sub-part

A

Expert Solution

Answer 11

Expert Solution

Answer 12

Sub-part

B

To determine

The impact of an increase in the net taxes on GDP.

Concept Introduction:

Fiscal Policy: Fiscal policy is the policy by which government regulates the nation’s economy by adjusting the government spending and controlling the tax rates. It tries to influence the demand side of the economy.

Sub-part

B

Expert Solution

Explanation of Solution

Fiscal Policy: Fiscal policy is the policy by which government regulates the nation’s economy by adjusting the government spending and controlling the tax rates. It tries to influence the demand side of the economy.

An increase in net taxes Increases in net taxes will reduce the disposable income of the people. This will reduce the aggregate demand as such reduce consumer spending, and thus have a negative impact on GDP.

Answer 13

Sub-part

B

To determine

The impact of an increase in the net taxes on GDP.

Concept Introduction:

Fiscal Policy: Fiscal policy is the policy by which government regulates the nation’s economy by adjusting the government spending and controlling the tax rates. It tries to influence the demand side of the economy.

Answer 14

Sub-part

B

Expert Solution

Explanation of Solution

Fiscal Policy: Fiscal policy is the policy by which government regulates the nation’s economy by adjusting the government spending and controlling the tax rates. It tries to influence the demand side of the economy.

An increase in net taxes Increases in net taxes will reduce the disposable income of the people. This will reduce the aggregate demand as such reduce consumer spending, and thus have a negative impact on GDP.

Answer 15

Sub-part

B

Expert Solution

Answer 16

Sub-part

B

Expert Solution

Answer 17

Expert Solution

Answer 18

Sub-part

C

To determine

The impact of reduction in transfer payments on GDP.

Concept Introduction:

Fiscal Policy: Fiscal policy is the policy by which government regulates the nation’s economy by adjusting the government spending and controlling the tax rates. It tries to influence the demand side of the economy.

Sub-part

C

Expert Solution

Explanation of Solution

Fiscal Policy: Fiscal policy is the policy by which government regulates the nation’s economy by adjusting the government spending and controlling the tax rates. It tries to influence the demand side of the economy.

A reduction in transfer payments Reduction in transfer payment will reduce consumer spending and thus will have a negative impact on GDP.

Answer 19

Sub-part

C

To determine

The impact of reduction in transfer payments on GDP.

Concept Introduction:

Fiscal Policy: Fiscal policy is the policy by which government regulates the nation’s economy by adjusting the government spending and controlling the tax rates. It tries to influence the demand side of the economy.

Answer 20

Sub-part

C

Expert Solution

Explanation of Solution

Fiscal Policy: Fiscal policy is the policy by which government regulates the nation’s economy by adjusting the government spending and controlling the tax rates. It tries to influence the demand side of the economy.

A reduction in transfer payments Reduction in transfer payment will reduce consumer spending and thus will have a negative impact on GDP.

Answer 21

Sub-part

C

Expert Solution

Answer 22

Sub-part

C

Expert Solution

Answer 23

Expert Solution

Answer 24

Sub-part

D

To determine

The impact of decrease in the marginal propensity to consume on GDP.

Concept Introduction:

Fiscal Policy: Fiscal policy is the policy by which government regulates the nation’s economy by adjusting the government spending and controlling the tax rates. It tries to influence the demand side of the economy.

Sub-part

D

Expert Solution

Explanation of Solution

Fiscal Policy: Fiscal policy is the policy by which government regulates the nation’s economy by adjusting the government spending and controlling the tax rates. It tries to influence the demand side of the economy.

A decrease in the marginal propensity to consumer A decrease in marginal propensity to consume implies an increase in the rate of savings and decrease in the rate of consumer spending. This implies the rate of consumption will reduce. This will decrease GDP.

Answer 25

Sub-part

D

To determine

The impact of decrease in the marginal propensity to consume on GDP.

Concept Introduction:

Fiscal Policy: Fiscal policy is the policy by which government regulates the nation’s economy by adjusting the government spending and controlling the tax rates. It tries to influence the demand side of the economy.

Answer 26

Sub-part

D

Expert Solution

Explanation of Solution

Fiscal Policy: Fiscal policy is the policy by which government regulates the nation’s economy by adjusting the government spending and controlling the tax rates. It tries to influence the demand side of the economy.

A decrease in the marginal propensity to consumer A decrease in marginal propensity to consume implies an increase in the rate of savings and decrease in the rate of consumer spending. This implies the rate of consumption will reduce. This will decrease GDP.

Answer 27

Sub-part

D

Expert Solution

Answer 28

Sub-part

D

Expert Solution

Answer 29

Expert Solution

Answer 30

Ch. 11 - Prob. 1.1P Ch. 11 - Prob. 1.2P Ch. 11 - Prob. 1.3P Ch. 11 - Prob. 1.4P Ch. 11 - Explain the difference between the government...Ch. 11 - Prob. 1.6P Ch. 11 - Prob. 1.7P Ch. 11 - Prob. 1.8P Ch. 11 - Prob. 2.10P Ch. 11 - Prob. 2.9P

The impact of decrease in the government purchase on GDP. Concept Introduction: Fiscal Policy: Fiscal policy is the policy by which government regulates the nation’s economy by adjusting the government spending and controlling the tax rates. It tries to influence the demand side of the economy.

The impact of decrease in the government purchase on GDP. Concept Introduction: Fiscal Policy: Fiscal policy is the policy by which government regulates the nation’s economy by adjusting the government spending and controlling the tax rates. It tries to influence the demand side of the economy.

Explanation of Solution

The impact of an increase in the net taxes on GDP. Concept Introduction: Fiscal Policy: Fiscal policy is the policy by which government regulates the nation’s economy by adjusting the government spending and controlling the tax rates. It tries to influence the demand side of the economy.

Explanation of Solution

The impact of reduction in transfer payments on GDP. Concept Introduction: Fiscal Policy: Fiscal policy is the policy by which government regulates the nation’s economy by adjusting the government spending and controlling the tax rates. It tries to influence the demand side of the economy.

Explanation of Solution

Explanation of Solution

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Chapter 11 Solutions

The impact of decrease in the government purchase on GDP.

Concept Introduction:

Fiscal Policy: Fiscal policy is the policy by which government regulates the nation’s economy by adjusting the government spending and controlling the tax rates. It tries to influence the demand side of the economy.

The impact of an increase in the net taxes on GDP.

Concept Introduction:

Fiscal Policy: Fiscal policy is the policy by which government regulates the nation’s economy by adjusting the government spending and controlling the tax rates. It tries to influence the demand side of the economy.

The impact of reduction in transfer payments on GDP.

Concept Introduction:

Fiscal Policy: Fiscal policy is the policy by which government regulates the nation’s economy by adjusting the government spending and controlling the tax rates. It tries to influence the demand side of the economy.