Answer Bank a decrease in taxes an increase in corporate bonds purchased a decrease in government spending a decrease in transfer payments an increase in the money supply a decrease in the unemployment rate an increase in government spending a decrease in the money supply an increase in tax rates

Q: What are some key factors that policymakers should consider when determining the optimal balance…

A: By efficiently allocating resources and encouraging investment, fiscal policy that strikes the ideal…

Q: Assume there is a decrease in the aggregate demand, if expansionary fiscal policy is being used, the…

A: Fiscal policy is the kind of policy using which government adjusts its spending levels and tax rates…

Q: Explain what the spending multiplier is. Describe the actions the government could take, using…

A: Spending measures the change in equilibrium GDP due to change in government spending.  Spending…

Q: Explain and show the consequence for fiscal policy if the marginal propensity to consume is a…

A: Fiscal policies are the public authority made approaches made to control, fortify and support the…

Q: ) In case of DEFLATION, mention that which particular type of fiscal policy will be used and why and…

A: Deflation: Deflation refers to a situation of overall contraction in economic activities or in other…

Q: Discretionary fiscal policy is policy that permanently changes government spending to slow the…

A: Fiscal policy refers to the use of government taxation and spending to influence and manage the…

Q: Explain how the conduct of fiscal policy affects consumption and investment in equilibrium.

A: Fiscal policy is a macroeconomic policy that is implemented by the government for monitoring and…

Q: Expresses in detail the effects of expansionary and contractionary fiscal policy on income and the…

A: In an economy, fiscal policies are implemented by the government to influence the aggregate demand…

Q: One argument often heard against using fiscal policy to tame the business cycle is that the lags…

A: A fiscal policy is one in which the government use taxes, spending, and borrowing as instruments to…

Q: In X-Men town the federal government must run a balanced budget. The town is currently in They might…

A: Fiscal policy is the tool of the government through which the govenrment alters the aggregate demand…

Q: If the government tries to reduce inflation when the production level in the country is higher than…

A: Fiscal policy is a tool used bu government to bring the economy back to full employment.

Q: Classify each statement based on the type of fiscal policy to which it refers. answer bank in image…

A: Expansionary fiscal policy: Expansionary fiscal policy refers to the situation where the government…

Q: An expansionary fiscal policy can increase the level of aggregate demand by decreasing government…

A: An expansionary fiscal policy can increase the level of aggregate demand by  reducing corporate tax…

Q: Suppose the economy is in a recession.  To combat the recession, Congress has decided to allocate $1…

A: A recession is a temporary period of economic slowdown, generally defined as  a fall in GDP over two…

Q: Fiscal policy of increasing government expenditures can be more potent than monetary policy in…

A: Fiscal policy works through changes in government expenditures and changes in taxes, while monetary…

Q: Use the Aggregate Demand – Aggregate Supply Model to demonstrate the effects of expansionary fiscal…

A: The curve that depicts various quantities of goods and services being demanded by individuals at…

Q: Identify a change in fiscal policy that will shift the composition of output toward investment.…

A: When a contractionary fiscal policy is adopted, it reduces government spending and raises taxes,…

Q: Define what is 'automatic stabiliser' in fiscal policy, and provide 2 examples

A: Meaning of Fiscal Policy: The term fiscal policy refers to the situation under which the…

Q: In each of the following cases, determine whether the policy is an expansionary or contractionary…

A: In the Keynesian macroeconomic theory, government plays a very important role in stabilizing the…

Q: Our macroeconomic model suggests that after a decline in aggregate demand like that of 2007, the…

A: "GDP (gross domestic product) measures the value of all finished goods and services produced within…

Q: Distinguish between a discretionary fiscal policy and a non - discretionary fiscal policy. Give…

A: The use of government spending and tax policies to influence economic conditions, particularly…

Q: One purpose of discretionary fiscal policy is to Multiple Choice O increase government spending…

A: An economy's overall health can be influenced by a government's tax, spending, and borrowing…

Q: You are the Secretary of the Treasury, working with the president to implement appropriate policies.…

A: Fiscal policy is set by the government to influence economic growth. It  is a change in government…

Q: Discuss the challenges of predicting the effects of discretionary fiscal policy on aggregate…

A: fiscal policy refers to the policy of taxation and expenditures of government. Government makes…

Q: Fiscal policy is implemented by: Congress (the House and the Senate). the President of the U.S. O…

A: Fiscal or monetary policy refers to macroeconomic initiatives taken by the government to guide the…

Q: Fiscal policy of increasing government expenditures can be more potent than monetary policy in…

A: Fiscal and monetary policy: Fiscal policy signifies the policies taken by the government of an…

Q: Which of the following could NOT be contractionary fiscal policy tool? OA) decreasing government…

A: Decreasing taxes is an expansionary economic policy tool, not a contractionary one. Contractionary…

Q: Write and apply the concept of multiplier with the help of suitable example and diagram. How does…

A: Fiscal policy: It refers to the policy which is used by the government to correct the various…

Q: Assign the correct label to the corresponding events/ policy actions that occurred during the…

A: The use of a collection of revenue and expenditure being incurred by the government in order to…

Q: Which is considered expansionary fiscal policy? a)a tax increase for wealthy individuals b)an…

A: Fiscal Policy is  the use of tax policy and the government expenditure that can influence the…

Q: QUESTION 32 If the economy is facing a recession, O the Fed should implement an expansionary…

A: Monetary policy is done to control and manage the amount of money in circulation and interest rates…

Q: List what specific, deliberate actions the federal government could take to enact expansionary…

A: Expansionary fiscal policy is aimed at increasing aggregate demand when the economy is in a…

Q: A fiscal Policy that seeks to promote stability and economic growth through tax cuts is? a)…

A: Fiscal policy refers to the use of government spending and taxation to influence the overall…

Q: How relevant is the multiplier concept to the implementation of expansionary and contractionary…

A: Spending multiplier: - it is a fraction that shows the magnitude of the change in national income…

Q: define expansionary and contractionary fiscal policy. explain how expansionary fiscal ploicy can…

A: When the government uses public spending, borrowing, taxation policy, etc. to change or initiate an…

Q: Expansionary fiscal policy , is a fiscal policy used to close a recessionary gap. is a revenue and…

A: Fiscal policy refers to the changes in the federal government purchases and taxes, which are…

Q: Differentiate between the expansionary fiscal policy and contractionary fiscal policy with diagram…

A: Fiscal Policy: Fiscal policy is used to influence aggregate demand and maintain stability in the…

Q: Distinguish between discretionary and nondiscretionary fiscal policy. What is the difference? What…

A: SUMMARY- Discretionary fiscal policy alludes to the policy drives taken up by the public authority…

Q: Fiscal Policy: Recessionary vs Expansionary Policy Complete the following exercises. 1. Describe a…

A:

Fiscal Policy and Money Market

Fiscal policy is one of the important tools that is used by the government to control inflation or aggregate demand in the economy. Under this policy, there are two rules which are used by the government, one is the expenditure of the government and the other is the taxation or income of the government which it collects from the public.