Principles of Macro. (Looseleaf)-With Access (Custom)
11th Edition
ISBN: 9781269334082
Author: CASE
Publisher: PEARSON
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Chapter 13, Problem 12P
To determine
Identify the effects of fiscal policy and
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Do treasury securities finance a federal budget deficit? If so would the government purchase treasury securities to finance the budget deficit or would they sell them?
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in deficit most of those years.
Raising the discount rate and the Federal Funds rate is which one?
contractionary fiscal policy
expansionary fiscal policy
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contractionary monetary policy
The FED purchasing government securities in the open market is which one?
expansionary monetary policy
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contractionary fiscal policy
Chapter 13 Solutions
Principles of Macro. (Looseleaf)-With Access (Custom)
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- What is the importance of fiscal policy during times of economic recession? What is the reason why fiscal policy should be in tune with monetary policy when the economy is in the recession phase? What is the importance of the Central Bank in the financial market?arrow_forwardWhy did the budget surpluses in 2000 and 2001 give way to a series of budget deficits beginning in 2002? Why did those deficits increase substantially beginning in 2008?arrow_forwardwhat type of fiscal policy or monetary policy that is currently being implementedarrow_forward
- How is the Social Security system currently influencing the size of the budget deficit? If it is not re-formed, how will Social Security influence the budget deficit a decade from now? Is this a cause for concern? Why or why not?arrow_forwardAn increase in the budget deficit is the result of:(a) Expansionary monetary policy(b) Contractionary monetary policy(c) Expansionary fiscal policy(d) Contractionary fiscal policyarrow_forwardMultiple‐choice questions: Select one correct answer for each of the following. In your answer booklet, write down only the number of the question and next to it, the letter of the correct answer. Q.1.1 An increase in the budget deficit is the result of: (2) (a) Expansionary monetary policy; (b) Contractionary monetary policy; (c) Expansionary fiscal policy; (d) Contractionary fiscal policy. Q.1.2 Company tax is a: (2) (a) Progressive, direct tax; (b) Progressive, indirect tax; (c) Proportional direct tax; (d) Regressive indirect tax. Q.1.3 In the base year, a country produced 50 units of output at a price of R6,00 each for a nominal GDP of R300. This year it produces 60 units of output at a price of R8,00 each. What is the percentage change in real GDP since the base year? (2) (a) 5%; (b) 10%; (c) 20%; (d) 15%. Q.1.4 Which of the following statements about Fiscal Policy is INCORRECT? (2) (a) In order to combat inflation, the South African Reserve…arrow_forward
- Fiscal Policy is conducted by:______________________, and Monetary Policy is conducted by:_______________________. The Fed Congress and the Presidentarrow_forwardThe Federal Reserve governs U.S. Supreme Court nominations. nondiscretionary fiscal policy. discretionary fiscal policy. monetary policy.arrow_forwardQ.1.1 An increase in the budget deficit is the result of: (a) Expansionary monetary policy;(b) Contractionary monetary policy;(c) Expansionary fiscal policy;(d) Contractionary fiscal policy.arrow_forward
- Review the rubric to make sure you understand the criteria for earning your grade. Read the articles An Update on the Economy and Monetary Policy and Recent and Near-Term Fiscal Policy Write a five- to six-page paper answering the following regarding fiscal and monetary policy changes: Explain the key aspects of today’s monetary policy and how they are affecting GDP and aggregate demand/aggregate supply. Explain the key aspects of today’s fiscal policy and how they are affecting GDP and aggregate demand/aggregate supply. Are these policies being well coordinated today? In essence, are they both working in unison to address current economic conditions? Explain. What are these policies’ effects on aggregate supply and aggregate. Do understand they affect supply as well as demand. You must use a minimum of five sources for your research paper, at least three of which are scholarly. Use proper spelling, grammar, and APA formatting for your analysis paper. When you have completed your…arrow_forwardAccording to Donald Trump, the United States can pay its debt by _______.arrow_forwardWhich of the below statements is INCORRECT about budget deficits and surpluses? Group of answer choices An economy should steer clear of deficit budgets even during economic recessions. If an economy slips into a recession, tax revenues will fall, but raising taxes will certainly worsen the situation. A budget deficit is funded by borrowing money by selling treasury bonds, which requires the government to pay back the interest on the amount borrowed, plus the principal borrowed. Since 2001 the U.S. has been consistently spending more than the tax revenue is collected, and the amount borrowed plus interest owed has been accumulating to a rather large national debt. A budget deficit occurs when the government spends more than it collects in tax revenues.arrow_forward
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