3. The Keynesian view of fiscal policyWhich of the following could cause a decrease in the budget deficit? Check all that apply.O Expansionary fiscal policyO An economic recessionO An economic expansionRestrictive fiscal policy

Restrictive fiscal policy is a tool of government, where it will try to cut its spending. Generally,…

Answered: 3. The Keynesian view of fiscal policy…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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60 Suppose the government, in an effort to avoid an increase in the deficit, votes for a budget neutral tax cut policy. Assume the marginal propensity to consume (MPC) is equal to 0.85 and taxes are cut by $8 billion. Round answers to the nearest billion, and specify decreases as a negative number. By how much will government spending change? change in government spending: $ What is the resulting change in the equilibrium level of real GDP? change in equilibrium level of real GDP: $ billion
6. Does government borrowing crowd out private spending? Suppose a hypothetical economy is operating at an output level that is well below full employment. In an attempt to increase aggregate demand, the government borrows money in order to increase spending. According to Keynesian economists, how are each of the following items affected by the increase in government spending and borrowing? Increases Decreases Consumer and Business Optimism O O Consumption O Business Investment O
a. What is the role of aggregate demand in eliminatingthe GDP gap? How does the slope of the AS curveaffectthe fiscal policyactions necessary to eliminatethe GDP gap?b. Define and give three examples of automaticstabilizers.c. How can a larger government fiscal deficit cause alarger international trade deficit?
1.6
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The Canadian government spending in recent years has resulted in persistent deficits. This has made it so that they have had to increase borrowing. They must be careful since this will lead to Select one: O a Crowding out O b. Transfer payments Oc. Implicit liabilities Od Automatic stabilizers Examples of automatic stabilizers set up in the economy would be everything listed EXCEPT for: Select one: O a. Child daycare benefits b. The prices of goods O c. Income Taxes O d. Unemployment payments Clear my choice
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.
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Assume an economy where the government embarks on an expansionary fiscal policy, explain the effect on equilibrium and interest rate if: a. There is a crowding out of the Private sector. b. The initial expansionary fiscal Policy was accompanied by an increase in money supply explain both senarios with the aid of diagrams
Please do questions D-F. Thanks

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3. The Keynesian view of fiscal policy Which of the following could cause a decrease in the budget deficit? Check all that apply. O Expansionary fiscal policy An economic recession O An economic expansion Restrictive fiscal policy