Macroeconomics
13th Edition
ISBN: 9781337617444
Author: Roger A. Arnold
Publisher: Cengage
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Question
Chapter 18, Problem 4QP
To determine
Acceptability of the statement.
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Students have asked these similar questions
Would you kindly explain the fallacy or mistake in this type of thinking.
Identify the fallacy or mistake in thinking in each of the following statements:
a. Lowering taxes always lowers government revenues.
b. Whenever there is a economic expansion, imports increase.
Should the United States government attempt to operate under a balanced budget? Why, or why not?
Which of the following is NOT a category of fiscal policy?
Government policies regarding the purchase of goods and
services
Government policies regarding taxation
Government policies regarding transfer payments and
welfare benefits
Government policies regarding money supply in the economy
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- Which system of taxes is best? Why does that system is the most effective way for the government to generate revenue and maintain our economy's growth?arrow_forwardWhen the economy is in recession, government revenue falls due to a falling tax base. Therefore the proper role of government should be to increase taxes and cut spending so as to balance the Federal budget. Do you agree? Why?arrow_forwardA: What are the three fiscal policy tools? B: How would change each tool if your goal was to reduce unemployment? C: How would you reduce each tool if your goal was to reduce inflation? D: Supply shocks cause both unemployment and inflation to increase. Given the results in B and C can fiscal policy be used successfully to reduce both inflation and unemployment at the same time? Explain!arrow_forward
- If government increases spending and wants to maintain a balanced budget, it shouldarrow_forwardDescribe some fiscal policies that governments are presently using to counter the impact of coronavirus on an economy. Discuss if these policies are more, or less likely, to deliver long-term social equity. Could these policies be used to create more social security/welfare; discuss and compare any negative consequences that these policies could have on an economy and critique the various ways the government could minimise or remove such negative consequences?arrow_forwardYou are given data on the following variables in an economy: Government spending 300, Total Investment 200, Net Exports 50, Total Tax Revenue 250, Income tax rate 10%. How much income should been arned by the businesses and the individuals in order for the government to reach a balanced budget?arrow_forward
- This course is designed to provide an understanding of market economies and the fluctuations they are subject to. With this in mind, please answer the questions that follow. a) Assume the economy is in a recession. Discuss how the government could implement fiscal policy to deal with the recession and the steps by which fiscal policy moves the economy out of the recession (Explain fully). b) Explain how expansionary fiscal policy in the U.S. would affect the economies of other countries.arrow_forwardTrace the implications of a government budget surplus on the following: National saving Interest rates Private investment Economic growth Future living standards When tracing the effects of the budget surplus, list the assumptions you are making.arrow_forwardWhy does the budget require a forecast of the economy? Under what circumstances would actual government spending and tax revenue fail to match the budget as approved? kindly explain answers in a simpler way.arrow_forward
- During an economic _______, there is a decline in economic activity, including falling GDP, rising unemployment, and reduced consumer spending. To combat this, governments often implement _______ fiscal policies to stimulate the economy. A) expansion, contractionaryB) downturn, expansionaryC) boom, contractionaryD) recession, expansionary.arrow_forwardWhich of the following best describes a fiscal policy tool? 1. Government spending II. Government taxes III. Interest rates. IV. Bank lending V. Financial capital markets I and II I and VI III, IV, and Varrow_forwardWhat are monetary, fiscal and growth and supply side policies. How can a government utilize fiscal policy to stimulate an economy that is in a recession, or in a debt crisis? In your answer outline two (2) challenges the government may face implementing a fiscal policy measure.arrow_forward
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