Don"t use aiPlease solve steps wise and add explanation of correct and incorrect options.. check properly before submit Question 1In an aggregate demand-aggregate supply diagram, equal increases in government spending and taxes will cause:O decrease in the equilibrium GDP.shift the AD curve to the right.not affect the AD curve.shift the AD curve to the left.Question 2The set of fiscal policies that would be most expansionary:Decrease in government spending and an increase in taxesIncrease in both government spending and taxesIncrease in government spending and a decrease in taxesDecrease in both government spending and taxesQuestion 3A Federal budget deficit exists when:O Federal government assets are less than liabilitiesO Federal government spending is increasingFederal government taxation is decreasingO Federal government spending exceeds tax revenues2 pts2 pts2 pts

Q1) 1) The correct option is C. a) Change in government spending will lead to government multiplier…

Answered: Question 1 In an aggregate…

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter24: Fiscal Policy

Section: Chapter Questions

Problem 5P

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Explain the difference between the government purchases multiplier and the net tax multiplier. If the MPC falls, what happens to the tax multiplier?
Question 4 functions as an automatic fiscal stabilizer because it increases when the economy is in a recession and decreases when the economy is in a recovery or boom. O Real GDP Nominal GDP O Unemployment insurance O Inflation
1. Provide a written conclusion on Fiscal Policy?
Expansionary fiscal policy include Select one: O a. an increase in net taxes O b. an increase in government spending O c. a decrease in government spending
12. What is the purpose of the following fiscal policies? a. Contractionary fiscal policy b. Expansionary fiscal policy TCA hift mand to the right
|An economy is in a below full-employment equilibrium. What is the effect on aggregate demand and real GDP, and the price level of fiscal stimulus that returns the economy to full employment? What is an example of fiscal stimulus that returns the economy to full employment from a below full-employment equilibrium? Fiscal stimulus that returns the economy to full employment _______ aggregate demand and real GDP, and the price level _______. A. increases; falls B. decreases; falls C. does not change; does not change D. increases; rises The fiscal stimulus that returns the economy to full employment from a below full-employment equilibrium _______. A. could be an increase in government expenditure and an equal increase in taxes B. could be a decrease in government expenditure and an equal decrease in taxes C. must be a decrease in taxes D. must be an increase in government expenditure
Question 25 Which of the following is true regarding the simple tax multiplier? I has the same sign but larger magnitude than the simple fiscal multiplier. O It has the same sign but lower magnitude than the simple fiscal multiplier. O t has the opposite sign and lower magnitude than the simple fiscal multiplier. It has the opposite sign and a larger magnitude than the simple fiscal multiplier.
Discuss the current Fiscal Policy with the impact of the coronavirus on macroeconomics in place to support the US economy. Also, explain how the Fiscal Policy is expected to impact GDP, Inflation and unemployment. Plz do fast asap
explanation. Be sure to exp Assume the United States has been in another recession for the past 10 months. Unemployment is 10% and GDP has dropped $1.9 trillion from its previous peak of $ 20.8 trillion. The housing and heavy equipment industries have been hit the hardest. Inflation has been near the 2% target but has started to dip below. Also, the countries average MPC is 60. Determine the best fiscal policy/strategy to help the economy recover and explain why it is the best choice. Be sure to reference Aggregate Demand and Aggregate Supply and explain your specific tools in your answers. Calculations Explanation Graph (More space for the explanation on the back)
Fiscal policy creates a multiplier effect because O The government always runs a deficit Government spending and tax changes will generate even more government spending O Government spending and tax changes will cause other economies to do the same thing. Government spending and tax changes will generate additional changes in consumer spending, creating more jobs, production and even more ripples of additional spending
Specify whether expansionary or contractionary fiscal policy would seem to be most appropriate in response to each of the situations below and sketch a diagram using aggregate demand and aggregate supply curves to illustrate your answer: a. A recession. b. Astockmarket collapse that hurtsconsumer and business confidence. c. Extremely rapid growth of exports. d. Rising inflation. e. A rise in the natural rate of unemployment. f. A rise in oil prices.
15. If consumers in a country spend 3/4 of their disposable income. If their governmentincreases its spending by 75 trillion and in order to maintain a balanced budgetsimultaneously increases taxes by 75 trillion. Calculate the effect of the 75 trillion change ingovernment spending and 75 trillion change in taxes on the country’s aggregate demand.

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