3. 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. Arecession. b. A stock market collapse that hurts consumer and business confidence. c. Extremely rapid growth of exports. d. Rising inflation. e. Arise in the natural rate of unemployment. f. Arise in oil prices.

Explain each of the tools that exist in expansionary fiscal policy and contractionary fiscal policy.

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."

1. Use of discretionary policy to stabilize the economy In an effort to stabilize the economy, is it best for policymarkers to use monetary policy, fiscal policy, or a combination of both? The following questions address the ways monetary and fiscal policies impact the economy and the pros and cons associated with using these tools to ease economic fluctuations. The following graph shows a hypothetical aggregate demand curve (AD), short-run aggregate supply curve (AS), and long-run aggregate supply curve (LRAS) for the economy in January 2025. According to the graph, this economy is in .To bring the economy back to the natural level of output, the government could use monetary or fiscal policy such as Shift the appropriate curve on the following graph to illustrate the effects of the policy you chose. 150 LRAS AS 110 X AD 70 24 26 OUTPUT (Trillions of dollars) PRICE LEVEL 130 85 50 20 22 28 30 AD ロー AS ? Suppose that in January 2025, policymakers undertake the type of policy that is…

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.

Which of the following is NOT a problem associated with implementing fiscal policy. a. Policy lags b. Information lags c. Interest rate lags Od. Impact lags

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.

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 overseas

Only D, E, F

Fiscal Policy: Recessionary vs Expansionary Policy Complete the following exercises. 1. Describe a policy measure the government can use to close a recessionary gap. 2. Illustrate your response to question 1 in a graph. 3. Describe a policy measure the government can use to close an inflationary gap. 4. Please Illustrate Graphically in response to question (question 3: Describe a policy measure the government can use to close an inflationary gap.)