EBK ECONOMICS
13th Edition
ISBN: 8220106799642
Author: PARKIN
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 30, Problem 14APA
(a)
To determine
Explain the impact of government budget balance on investment.
(b)
To determine
Explain the fiscal policy action of increase in investment and
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
When the economy is in a recessionary mode, what will likely be the actions by government using fiscal policy?
Our macroeconomic model suggests that after a decline in aggregate demand like that of 2007, the economy will self correct and return to a position where the GDP gap is zero. If this is correct, why should the government ever intervene with fiscal policy?
a.
It take many years for the GDP gap to close on its own.
b.
This is part of the government's "mission statement" as given in the Constitution.
c.
Fiscal policy is profitable for banks.
d.
People do not trust the theory behind the model.
a) Why can't the government run a budget deficit in a one-
period macroeconomic model?
b) Why are government transfer payments not included in
(expenditure-based) GDP?
Chapter 30 Solutions
EBK ECONOMICS
Ch. 30.1 - Prob. 1RQCh. 30.1 - Prob. 2RQCh. 30.1 - Prob. 3RQCh. 30.1 - Prob. 4RQCh. 30.1 - Prob. 5RQCh. 30.2 - Prob. 1RQCh. 30.2 - Prob. 2RQCh. 30.2 - Prob. 3RQCh. 30.2 - Prob. 4RQCh. 30.2 - Prob. 5RQ
Ch. 30.3 - Prob. 1RQCh. 30.3 - Prob. 2RQCh. 30.3 - Prob. 3RQCh. 30.3 - Prob. 4RQCh. 30.3 - Prob. 5RQCh. 30.4 - Prob. 1RQCh. 30.4 - Prob. 2RQCh. 30.4 - Prob. 3RQCh. 30.4 - Prob. 4RQCh. 30.4 - Prob. 5RQCh. 30 - Prob. 1SPACh. 30 - Prob. 2SPACh. 30 - Prob. 3SPACh. 30 - Prob. 4SPACh. 30 - Prob. 5SPACh. 30 - Prob. 6SPACh. 30 - Prob. 7SPACh. 30 - Prob. 8SPACh. 30 - Prob. 9SPACh. 30 - Prob. 10SPACh. 30 - Prob. 11SPACh. 30 - Prob. 12APACh. 30 - Prob. 13APACh. 30 - Prob. 14APACh. 30 - Prob. 15APACh. 30 - Prob. 16APACh. 30 - Prob. 17APACh. 30 - Prob. 18APACh. 30 - Prob. 19APACh. 30 - Prob. 20APACh. 30 - Prob. 21APACh. 30 - Prob. 22APACh. 30 - Prob. 23APACh. 30 - Prob. 24APACh. 30 - Prob. 25APACh. 30 - Prob. 26APACh. 30 - Prob. 27APACh. 30 - Prob. 28APA
Knowledge Booster
Similar questions
- Should the government fight recessions with spending hikes rather than tax cuts ? Explain.arrow_forwardWhich of the following government actions is an example of fiscal policy? A. Regulation of utility prices. B. Increased government spending on social programs. C. Changes in the money supply. D. The institution of wage and price controls.arrow_forwardFiscal policy can affect the rental cost of capital. true or false?arrow_forward
- Identify one fiscal policy action that could counter the increase in investments. Explain how this policy will affect each of the following.i. Output ii. The price level iii. Nominal interest ratesarrow_forwardWhich of the following is NOT a problem associated with implementing fiscal policy. a. Policy lags b. Information lags c. Interest rate lags Od. Impact lagsarrow_forwarda) How can the government use fiscal policy during a downturn to stimulate the economy?arrow_forward
- If Investment = f(r*) a. Explain with pictures how it affects the balance of Supply/Saving and Investment Demand in the event of Fiscal policy, namely by decreasing state spending and increasing taxes. b. Explain with pictures how it affects the balance of Supply/Saving and Investment Demand in the event of Fiscal policy, namely by decreasing state spending and increasing taxes if it happens overseasarrow_forwardAssume there is no discretionary increase in government spending. Explain how an improving economy will affect the budget balance and, in turn, investment and the trade balance.arrow_forwardA. Differentiate between discretionary fiscal policy and nondiscretionary or built-in stabilization policy. B. When in a recession a government has the option to increase government spending or decrease taxes to stimulate the economy. Discuss which piece of GDP is being targeted when each is used.arrow_forward
- Which of the following is carried out in an expansionary fiscal policy? a. Higher taxes and higher government expenditure b. Lower taxes and higher government expenditure c. Higher taxes and lower government expenditure d. Lower taxes and lower government expenditure.arrow_forwardWhat are problems that governments may encounter in enacting and applying fiscal policy? Explain the effectiveness of the recent U.S. fiscal policy.arrow_forwardDo you think that conventional fiscal policy is different from islamic fiscal policy?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Principles of Economics (12th Edition)EconomicsISBN:9780134078779Author:Karl E. Case, Ray C. Fair, Sharon E. OsterPublisher:PEARSONEngineering Economy (17th Edition)EconomicsISBN:9780134870069Author:William G. Sullivan, Elin M. Wicks, C. Patrick KoellingPublisher:PEARSON
- Principles of Economics (MindTap Course List)EconomicsISBN:9781305585126Author:N. Gregory MankiwPublisher:Cengage LearningManagerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage LearningManagerial Economics & Business Strategy (Mcgraw-...EconomicsISBN:9781259290619Author:Michael Baye, Jeff PrincePublisher:McGraw-Hill Education
Principles of Economics (12th Edition)
Economics
ISBN:9780134078779
Author:Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:9780134870069
Author:William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-...
Economics
ISBN:9781259290619
Author:Michael Baye, Jeff Prince
Publisher:McGraw-Hill Education