Which of the following would be classed as an expansionary fiscal policy?O A.An increase in the money supplyОв.A reduction in the number of goods exempted from VATAn increase in government taxationOD.An increase in government expenditure

Fiscal policy is the one used by the government. The instruments used by the government in a fiscal…

Answered: Which of the following would be classed…

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter30: Government Budgets And Fiscal Policy

Section: Chapter Questions

Problem 15SCQ: What would happen if expansionary fiscal policy was implemented in a recession but, due to lag, did...

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Similar questions

Under what general macroeconomic circumstances might a government use expansionary fiscal policy? When might it use contractionary fiscal policy?
Why is spending by the U.S. government on scientific research at NASA fiscal policy while spending by the University of Illinois is not fiscal policy? Why is a cut in the payroll tax fiscal policy whereas a cut in a state income tax is not fiscal policy?
What would happen if expansionary fiscal policy was implemented in a recession but, due to lag, did not actually take effect until after the economy was back to potential GDP?
What are some of the ways fiscal policy might encourage economic growth?
Assume 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.
What is the main advantage of automatic stabilizers over discretionary 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
Which of the following would be classed as an expansionary fiscal policy? O An increase in the money supply O A reduction in the number of goods exempted from VAT O An increase in the VAT rate O An increase in government expenditure
Which of the following is carried out in an expansionary fiscal policy? O a. Higher taxes and lower government expenditure O b. Lower taxes and higher government expenditure O c. Higher taxes and higher government expenditure O d. Lower taxes and lower government expenditure.
Which of the following could NOT be expansionary fiscal policy tool? A )increasing money supply B) 3 ) increasing government expenditure O c) decreasing taxes O D) increasing transfer payments
'The U.S., world's largest economy, went into recession in February of 2020. It has taken a broad range of steps to combat the economic disruption caused by COVID-19. In response to this crisis, governments have enacted sweeping and sizable fiscal stimulus of trillions of dollars.' Is it an appropriate policy response if the primary responsibility of the government is to maintain economic growth? Explain the significance of Fiscal policy for an economy? Is there any difference in the two approaches of fiscal expansion through - direct transfer benefit and government spending directly on purchase of goods and services that may influence real GDP? What role does multiplier play? Explicate. Support your answer with the suitable diagram/s.
The existence of lags in designing and implementing fiscal policy helps illustrate some of the limitations of fiscal policy aimed at easing the burdens of a recession. Which of the following statements best describes a situation when fiscal policy is more appropriate? O The Implementation lag is shorter than the recognition and legislative lags. O Demand-pull Inflation is expected to occur as the economy begins to self-correct. O To stimulate an economy that is in a severe recession or one that is slow to correct. O Fiscal policy favors tax cuts Instead of increased government purchases since this removes the legislative lag.

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Which of the following would be classed as an expansionary fiscal policy? O A. An increase in the money supply O B. A reduction in the number of goods exempted from VAT An increase in government taxation O D. An increase in government expenditure