Automatic fiscal stabilizers the impact of demand or supply shocks on the economy since during booms and government's net tax revenues during recessions. A. magnify; increase; decrease B. magnify; decrease; increase C. does not affect; are constant; are constant D. dampen; increase; decrease E. dampen; decrease; increase

(Figure: Fiscal Policy Options) Use Figure: Fiscal Policy Options. If the aggregate demand curve is AD': Price level LRAS SRAS AD" AD

The overall effects of contractionary fiscal policy are a __________ in income, _________ in money demand, ____________ in the interest rate and a ________ in investment. a decrease, decrease, increase, decrease. b decrease, decrease, decrease, increase. c decrease, decrease, decrease, decrease. d none of the listed options. e decrease, increase, decrease, increase.

One criticism of the fiscal policy ineffectiveness is because: A.the velocity of money is predictable. B.it is dependent on Congress' approval. C.the crowding-out effect increases investment. D.prices and wages are sticky in the short run.

Automatic stabilizers are increases in spending and reductions in taxes that. Are enacted by the President when the economy enters in a recession Are enacted by Congress when the economy enters in a recession Are the result of existing tax and revenue spending rules Are required by the Department of Treasury as needed

income taxes and government spending during a recession. Automatic stabilizers increase; increase increase; decrease decrease; increase decrease; decrease

None

Automatic stabilizers cause government revenues to during a recession and cause government expenditures to during a recession. (Choose the answer that fills in the two blanks) a. Increase; decrease b. Increase; increase C. Decrease; decrease d. Decrease; increase e. Not change; not change

Show effect of expansionary fiscal policy in the short run and medium run. AS AD model using ISLM model.

a) What are the three fiscal policy tools and how would each be used to counter a contractionary gap?   b) True or False and explain: Fiscal Policy is effective at reducing the duration of an economic contraction.   c) True or False and explain: Households always react to tax changes in a predictable manner.