MACROECONOMICS FOR TODAY
10th Edition
ISBN: 9781337613057
Author: Tucker
Publisher: CENGAGE L
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Chapter 11, Problem 14SQ
To determine
The arguments of the supply side economics.
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Supply-siders ignore the effects of tax cuts ona, aggregate supply.b. aggregate demand.c, aggregate demand and aggregate supply.
d.none of these .
Give explanation for answer
By decreasing government spending and aggregate demand, the policy ________ the price level and ________ equilibrium real GDP, ceteris paribus.
Select one:
a. decreases; increases
b. increases; decreases
c. increases; increases
d. decreases; decreases
The economy goes into recession. Which of the following lists contains things policymakers could do to try to end the recession?
a. Increase the money supply, increase taxes, decrease government spending
b. Decrease the money supply, increase taxes, decrease government spending
c. Increase the money supply, increase taxes, increase government spending
d. Increase the money supply, decrease taxes, increase government spending
Chapter 11 Solutions
MACROECONOMICS FOR TODAY
Ch. 11.3 - Prob. 1YTECh. 11 - Prob. 1SQPCh. 11 - Prob. 2SQPCh. 11 - Prob. 3SQPCh. 11 - Prob. 4SQPCh. 11 - Prob. 5SQPCh. 11 - Prob. 6SQPCh. 11 - Prob. 7SQPCh. 11 - Prob. 8SQPCh. 11 - Prob. 9SQP
Ch. 11 - Prob. 10SQPCh. 11 - Prob. 11SQPCh. 11 - Prob. 1SQCh. 11 - Prob. 2SQCh. 11 - Prob. 3SQCh. 11 - Prob. 4SQCh. 11 - Prob. 5SQCh. 11 - Prob. 6SQCh. 11 - Prob. 7SQCh. 11 - Prob. 8SQCh. 11 - Prob. 9SQCh. 11 - Prob. 10SQCh. 11 - Prob. 11SQCh. 11 - Prob. 12SQCh. 11 - Prob. 13SQCh. 11 - Prob. 14SQCh. 11 - Prob. 15SQCh. 11 - Prob. 16SQCh. 11 - Prob. 17SQCh. 11 - Prob. 18SQCh. 11 - Prob. 19SQCh. 11 - Prob. 20SQ
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Similar questions
- Now consider an economy in which the government lowers its spending. In the long run, the result would be _____________ in the price level and _____________ in real output. an increase; an increase a decrease; no change a decrease; a decrease None of the listed options is correct. no change; a decreasearrow_forwardComment, on the likely outcome with sufficient arguments? a) Impact on aggregate demand of the economy if imports are greater than exports.b) Impact on aggregate demand if the GDP of trading partner is increasing at a faster rate than that of India.c) Inflation rate in the country has reached 6.73%.arrow_forwardWhat is the best combination of fiscal policies and monetary policies for a country like Japan whose price levels are increasing while unemployment is being controlled? a. Decrease taxes, increase government spending and increase money supply b. Decrease taxes, decrease government spending and decrease money supply c. None of these choice is correct d. Increase taxes, decrease government spending and decrease money supplyarrow_forward
- Suppose that the government decreases spending more than is necessary to close an inflationary gap. What is the MOST likely result? Inflation will increase. The price level will increase. Aggregate output will fall short of potential output. Aggregate output will increase.arrow_forwardThe economy is experiencing rapid inflation, pushing above 9%. Which fiscal policy action should the government implement in an attempt to fix this problem? A.) decrease interest rates B.) raise taxes C.) increase spending D.) increase reserve requirementsarrow_forwardWhich MOST likely will increase unemployment in the short run? a. a positive supply shock b. a positive demand shock c. expansionary fiscal policy d.stagflationarrow_forward
- What is the best combination of fiscal policies and monetary policies for a country like Japan whose price levels are increasing while unemployment is being controlled? a.None of the choices is correct b.Decrease taxes, decrease government spending and decrease money supply c.Decrease taxes, increase government spending and increase money supply d.Increase taxes, decrease government spending and decrease money supplyarrow_forwardGive free rice and electricity to poor families monthly Potential impact on the economy as objectively as you can. Arguments why this policy is good, why this policy is bad.arrow_forwardWhich of the following statements are FALSE? (a) When the government prints money to buy goods and services the resulting inflation is a form of tax, since people will not have to pay more for their goods and services than before. (b) An effective fiscal policy macroeconomic stimulus should aim to replace private spending with public (government) spending. (c) To be effective a fiscal policy macroeconomic stimulus should have temporary increases in spending and permanent tax cuts. (d) The paradox of thrift is that the increase in saving during a recession because people postpone major purposes prolongs the recession and thus is not good for the economy, while normally saving grows the economy.arrow_forward
- Should the government fight recessions with spending hikes rather than tax cuts ? Explain.arrow_forwardIf taxes are lowered, we can expect supply-side economists to support the decision to do so because a. government revenues will increase in the long run. b. government spending will decrease in the long run. c. the government will spend more in the short run. d. economic growth cannot occur without it.arrow_forwardHow an economist thinks that the economy works—is it self-regulating or not?—influences his opinion of the role government should play in trying to stabilize the economy. Do you agree or disagree? Explain your answer.arrow_forward
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