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Economics: Private and Public Choice (MindTap Course List)
15th Edition
ISBN: 9781285453538
Author: James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher: Cengage Learning
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Question
Chapter 11, Problem 6CQ
To determine
Implication of fiscal policy when economy is unstable.
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Students have asked these similar questions
According to Keynesian economics, which of the following is effective fiscal policy when there is a problem of unemployment?
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Economics: Private and Public Choice (MindTap Course List)
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- In the AS/AD model of the economy, fiscal policy aims to shift which curve?arrow_forwardAccording to Keynesian economics, which of the following is effective fiscal policy when there is a problem of unemployment?a) reduce market prices.b) increase government purchasesc) doubling the money supply.d) reduce interest rates significantly.arrow_forwardAccording to Keynesians, when should the federal government run a budget deficit and when should it run a surplus?arrow_forward
- When the economy is in a recessionary mode, what will likely be the actions by government using fiscal policy?arrow_forwardWhat are the reasons of fiscal policy not being effective in an economy according to classical economists?arrow_forwardUsing the concept in Keynesian economics, which one of the following may not be an effective fiscal policy when there is inflation? a) increasing aggregate demand b) increasing corporate taxes. c) increasing personal taxes. d) decreasing government purchases.arrow_forward
- Analyze fiscal policy in order the generate macroeconomic stability.arrow_forwardIf stability of the economy is the primary objective of Fiscal Policy, then an Annually Balanced Budget (Government Expenditures = Tax Revenues) is the best policy approach. True or False?arrow_forwardHow did John Maynard Keynes economic theory influence the 20th Century fiscal policy?arrow_forward
- According to Keynesian economics, what impact would a balanced budget amendment to the constuition requiring the federal government to balance its budget annually have on the economy?arrow_forwardHow could fiscal policy alleviate the problem? What specific policy changes would be needed?arrow_forwardAccording to Keynesians, when should the federal government run a deficit and when should it run a surplus?arrow_forward
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