In boosting macro and micro level business as a result of Covid-19, the government of Ghana as part of the strategy to restore confidence in the economy is providing a Ghc 1 billion stimulus package. Discuss fours ways that the financial market can benefit from this package
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In boosting macro and micro level business as a result of Covid-19, the government of Ghana as part of the strategy to restore confidence in the economy is providing a Ghc 1 billion stimulus package. Discuss fours ways that the financial market can benefit from this package
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- Consider the list of situations below faced by an imaginary country that is suffering an economic crisis. Classify each situation as either a result of discretionary fiscal policy or an automatic stabilizer in the economy. 1. Higher government spending in unemployment benefits due to a rise in the number of unemployed people II. A decrease in tax collection due to a decrease in business profits III. Higher public spending due to the introduction of a new emergency credit line for businesses, subsidized by the government IV. Smaller tax revenue resulting from an increase in the amount of households that fall under the poverty line V. Smaller tax revenue due to the approval of a bill that provides tax cuts for small businesses Group of answer choices A. Situations III and V are discretionary fiscal policy, and I, II and IV are automatic stabilizers B. All the situations above are automatic stabilizers C. All the situations above are automatic stabilizers, except for V D. Situations I and…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?Which of the following statements about the economic fallout of the Covid-19 pandemic is false? O. Congress acted quickly and responded with unprecedented stimulus programs tohelp households and business that have been hurt because of the Covid-19 pandemic.O. The financing of fiscal stimulus packages significantly reduced the ability ofprivate sector firms to borrow in the loanable funds market.O. In the early months of the Covid-19 pandemic, unemployment agencies wereunequipped to handle the large volume of insurance claims.O. Millions of people have become unemployed because of the Covid-19 pandemic.
- Scenario You are a member of the president's Council of Economic Advisers for the country of Manulo. Currently the economy of Manulo is feeling the impacts of the crisis in the nation of Zedland, a major trade partner. Manulo's GDP is currently at $300b and is estimates show that Manulo's economy has the capacity to produce $360b. As a nation Manulo has a Marginal Propensity to Save of 10%, has zero national debt, and its most recent government budget was balanced. Prepare a brief report that answers the following questions: 1. Based on what you explained previously (scenario 4) about short run vs long equilibrium, the president favors immediate action, and wants you put together a fiscal policy response. Which fiscal policy action would you recommend (expansionary or contractionary)? Explain your rationale with words. 2. The president wants to use government spending, rather than taxes, to close the output gap in the economy. The output gap refers to the difference between the…What are implications for a government running deficits?How could that be effectively addressed?What are the ethical concerns of the deficit?If tax cuts don't cause enough economic growth, we might also need to reduce expenditures to reduce the deficit. Explain?
- Using a graphical analyses explore the consequences for a hypothetical developing economy, if the the rate of borrowing to fund a fiscal deficit is growing annually at a faster rate than GDP."How might large federal deficits affect future economic growth?"Solve the national-income model Y = C + lo + Go C = 160 + 0.55Y – 0.004Y² | Go = 0.25 Y %D where Io = 40 dan To 140. Does the government incur a budget surplus or a budget deficit according to this model?
- Sketch a diagram of how sustained budget deficits cause low economic growth.Examine the consequences for a hypothetical developing economy if the rate of borrowing to fund a fiscal deficit is growing annually at a faster rate than the GDP. Include a graphical analyses using the below hypothetical numbers and percentages. GDP = R1000 Fiscal Deficit = R1200 GDP is used to settle / pay for fiscal deficits. Therefore R1000 - R1200 = R200. This implies that the deficit keeps on growing. Remember the GDP equation and the impact of imports and exports.Identify one real world example that illustrate how fiscal policy can facilitate economic growth in a country