1) Define MPC(marginal propensity to consume) and MPS(marginal propensity to save) 2) Define multiplier effects, based on Keynesian Fiscal policy. 3) When economy falls into a recession, what kind of fiscal policy is needed? Give a specific tool of fiscal policy. 4)Discuss the long run effects of "Crowding out" due to a short run expansionary fiscal Policy. 5) Treasure Hunt:  a) Go to www.cengage.com/sso (Links to an external site.)Links to an external site.  web site. At Bookshelf of Arnold economics of 11th edition, click Economics Course Mate of Economics(11th ed) by Roger A Arnold . Then, click "select chapter" for Ch 11  and try Ch11: Fiscal policy  to get  access to " Video Office hours  "  left menu bar.     Summarize the contents of "Video Office hours". (3 points) b) Summarize the contents of "Working with Diagrams" of Ch  8 , 9 ,  10  and 11 at  www.cengage.com/sso (Links to an external site.)Links to an external site.

Suppose the economy begins at full employment. Label this starting point as point "1." Then, suppose that a long strike by coal miners reduces the coal supply and increases the price of coal. Show the effects on your graph and label the new equilibrium point "2." Lastly, suppose our government wants the economy to return to full-employment as quickly as possible. Should the government intervene? If so, show the impact of successful fiscal policy on your graph. Label this new equilibrium point "3."

List what specific, deliberate actions the federal government could take to enact expansionary fiscal policy.

do fast.

List the 3 major economic goals of fiscal policy.   Who is responsible for fiscal policy?       What issue or problem in the economy would be fixed with expansionary fiscal policy? Contractionary fiscal policy?   Using an aggregate supply and demand graph, show what happens when expansionary fiscal policies are enacted such as the 2017 Tax Cuts and Jobs Act when the economy is at full employment. Label all of the curves, the vertical and horizontal axis and show the direction and impact on the economy.

True or False and explain: Fiscal Policy is effective at reducing the duration of an economic contraction.

A country is experiencing a recession due to an unexpected shock to aggregate demand. The economy's current level of real GDP is below its long-run equilibrium and the price level is below the equilibrium price level. Government officials must decide whether to implement fiscal policy or allow the economy to return to full employment on its own. a. Suppose that government officials have decided to implement expansionary fiscal policies. What are their desired outcomes? Instructions: You may select more than one answer. Click the box with a check mark for correct answers and click again to empty the box for the incorrect answers. ? increase aggregate supply increase aggregate demand ? expand real GDP ? raise the price level reduce unemployment ? control inflation b. Which of the following policy is consistent with expansionary fiscal policy? O Increase sales tax rates. O Reduce personal income tax rates. O Reduce spending on government infrastructure. O Increase the amount of currency…

5. New classical view Suppose the government of a hypothetical economy decides to pursue a restrictive fiscal policy by permanently decreasing government expenditures. The following graph shows the market for loanable funds in this hypothetical economy. Show the effect of the restrictive fiscal policy according to the new classical view by shifting the appropriate curve or curves on the following graph of the loanable funds market. If you decide that the policy produced no effect, leave the graph unchanged. Supply Demand Supply Demand QUANTITY OF LOANABLE FUNDS The following graph shows the goods and services market for the same hypothetical economy. Show the effect of the restrictive fiscal policy according to the new classical view by shifting the appropriate curve or curves (aggregate demand, AD; aggregate supply, AS) on the following graph of the goods and services market. If you decide that the policy produced no effect, leave the graph unchanged. INTEREST RATE

Some Economists argue that Fiscal policy have no effects in the long run on employment and aggregate output in the economy. What are the arguments behind this belief? EXplain. If indeed the government has to apply the expansionary fiscal policy what would eventually happen to the economy. Explain step by step the process impacting the economy.

Solve question number 1 only.  Choose correct option with explanation. Correctly solve it. If you know answer then only solve