Answer True or False: 1. To reduce the fiscal deficit, the government has to raise taxes or cut spending.

Q: 6. Explain how built-in (or automatic) stabilizers work. What are the differences between…

A: GDP is the sum of consumption, investment, government spending and net exports.  GDP = C+I+G+NX

Q: 2. What are some of the predicted effects of repealing DACA on the U.S. federal budget? Repealing…

A: DACA was created to safeguard qualifying immigrant teenagers who arrived in the United States as…

Q: 1. If a government runs a primary fiscal deficit, and has no source of additional revenue other than…

A: Fiscal deficit refers to how much a government's spending exceeds its revenue during a fiscal year.…

Q: Assume an economy where the government embarks on an expansionary fiscal policy, explain the effect…

A: An expansionary fiscal policy is undertaken by the government during recession when the actual GDP…

Q: 6. A reduction in government expenditure or an increase in taxes is defined as: 1. expansionary…

A: We know that Expansionary policy is employed with the aim of boosting aggregate demand when private…

Q: 2. Assume the recessionary gap in two countries = 10 million Euros. The governments decide to fight…

A: Crowding out is the phenomenon where increase in government spending lead to rise in interest rate…

Q: If counter-cyclical fiscal policy causes crowding-out, which of the following statements is correct?…

A: The counter-cyclical fiscal policies are measures that counteract the effect of the economic cycle.…

Q: 3. The Keynesian view of fiscal policy Which of the following could cause a decrease in the budget…

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

Q: Many economists think discretionary fiscal policy is of limited effectiveness in stabilizing the…

A: Discretionary fiscal policy is the policy of government that alters the spending of government or…

Q: 4. In the New-Keynesian model where government expenditure is financed through taxation only, if…

A: When government raises its expenditure by 100 in order to increase output, it leads to a rise in the…

Q: The aggregate demand and supply for Cancum are shown in the table below. Potential GDP (LAS) is $550…

A: Equilibrium in the economy occurs at the point where aggregate demand (AD) and aggregate supply (AS)…

Q: .When an economy has an aggregate expenditure of $150 billion and the real GDP of $140 billion, then…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: 2. The graph below shows the AD-AS diagram for Canada. 1200+ 1100+ 1000 AD 900 800 - 700+ 600 +…

A: The point at which aggregate demand and aggregate supply intersects is the point at which the actual…

Q: 1) Suppose that the government spending multiplier is 1.7, and that the tax multiplier is -1.2. An…

A: Total change multiplier =sum of the multiplier of spending and taxes =1.7+(-1.2)=0.5 There is an…

Q: 100 80 60 40 20 O $100 200 300 400 500 600 700 800 900 GDP Refer to the diagram, in which Tis tax…

A: When spending surpass receipts, a budget deficit occurs, and it indicates a country's financial…

Q: Answer the questions below for the economy of Motak using the graph below. Government spending / net…

A: Government spending implies money spent by the public sector on the purchase of products and…

Q: A college wants to produce an effigy for the student carnival. Preliminary studies made it possible…

A: Given informationFixed cost of producing effigy = $2008Variable cost = $0.90 per effigyWhenSelling…

Q: 100 T 80 60 40 20 O $100 200 300 400 500 600 700 800 900 GDP Refer to the diagram, in which Tis tax…

A: In this question we have to find out the actual budget deficit, cyclically adjusted budget deficit…

Q: 1. Given the discussion of the effects of fiscal policy in this​ chapter, if the central bank does…

A: Fiscal policy refers to the use of government disbursement and tax policies to influence economic…

Q: 9. Focusing on the tax cut of 1982, the personal current tax receipts for 1981, the year before the…

A: Tax incidence:It is a necessary payment that is made to the government for the consumption of goods…

Q: 4. Assume the government cuts taxes and the marginal propensity to save is 0.4. a. Would this be…

A: The sum of marginal propensity to consume and marginal propensity to save is equal to 1. The…

Q: reduction in government expenditure or an increase in taxes is defined as:

A: Expansionary policy is employed with the aim of boosting aggregate demand when private demand is…

Q: a. In which instance would "crowding out" likely become a concern? A balanced budget law prevents…

A: Introduction: Crowding out refers to a situation where increased government borrowing to finance…

Q: 07. What factors make an expansionary "stimulus" fiscal policy effective?     a) A government…

A: Fiscal stimulus can raise output and incomes in the short run. To have the greatest impact with the…

Q: 1. Which of the following would neutralize and offset the stimulating effect of deficit spending? *…

A: When government increases spending to boost Aggregate demand, the government injections to the…

Q: 60 Suppose the government, in an effort to avoid an increase in the deficit, votes for a budget…

A: A budget deficit occurs when a government's expenditures exceed its revenues within a specific…

Q: Which of the following statements are correct (assuming a closed economy)? 1. The higher the…

A: Fiscal policies are the actions taken by the government to interfere in the economy and help the…

Q: 6. Does government borrowing crowd out private spending? Suppose a hypothetical economy is operating…

A: Full employment is what is going on in which all suitable work assets are being utilized in the most…

Q: a fiscal gap and a generational gap

A: The time bomb caused by social security and Medicare creates both a fiscal as well as a generational…

Q: 6. Automatic stabilizers Which of the following are examples of automatic stabilizers? Check all…

A: Automatic stabilizers are the economic factors that lead to automatically stabilizing the economy…

Q: 4. The government decides to pursue a policy of keeping the amount of tax revenue it collects to be…

A: Tax revenue alludes to the aggregate sum of money gathered by a government through taxation. It…

Q: Assuming a constant money supply, government expenditures can be financed by which of the following?…

A: The money supply helps the economy to grow by increasing the purchasing power on one hand while it…

Q: a. If GDP is $800 and government spending is G₁, the size of Motak's budget deficit is $ b. If…

A: DISCLAIMER  “Since you have asked multiple question, we will solve the first three subparts question…

Q: Fill in the blanks with the correct set of words to make the following sentence accurate. Due to the…

A: The COVID-19 pandemic had a huge and important economic effect on Canada, causing it to enter a…

Q: 07. What factors make an expansionary "stimulus" fiscal policy effective? One answer     a) A…

A: The fiscal policy refers to a policy which is used to influence the aggregate demand in the economy.…

Q: 1. Suppose the economy has fallen into a recession (output level ?0), and the federal government…

A:

Q: 19. Gross investment is the total amount spent on purchases of new capital and on replacing…

A: Note: “Since you have asked multiple questions, we will solve the first question for you. If you…

Q: 14. Suppose that Korea has been in recession and many economists have concerns about the long-term…

A: Recession: A recession can be defined as a macroeconomic phrase that denotes a considerable drop in…

Q: When GDP and incomes are high the government collects more dollars in tax revenue. When they're low,…

A: GDP is the value of final goods and services produced in the economy within a given period of time.

Q: 28. Which of the following policies might provide a remedy when the equilibriun output in an economy…

A: When the equilibrium output is above the potential level of output the economy experiences an…

Q: Felix lives in the fictional country of Lindelof, which raises government revenue by taxing everyone…

A: Tax is the compulsory payment that imposed by the government on production, income and profit.

Q: 6. The amount by which federal tax revenues exceed federal government expenditures during a…

A: "Government of a nation plays an important role in stabilizing economy. Government make expenditures…

Q: 7. The national debt a. Is paid off each fiscal year when the debt is refinanced. b. Will never be…

A: The national debt refers to the total outstanding financial obligations of a national government. It…

Q: Assume that the economy experiences very high increasing energy prices. 1. Explain about what…

A: Price: It refers to the rates at which goods and services are available in the economy. The more the…

Q: 1. Use the graph below to answer the following questions: BB (Go fo) BB, (G₁.) 4700 5000 5300 Real…

A: A budget deficit refers to a state when a government's expenses surpass its revenue over a specific…

Q: 4. Primary fiscal surplus refers to:   a. private savings   b. total savings   c. public…

A: The primary surplus  of a country refers to the portion of the fiscal surplus that is made up of…