automatic stabilizer is a feature of the economy that

Cite the five major demand-side components of GDP. Then, identify the major elements affected by fiscal policy.

Using the aggregate demand and supply model shows how a government can manage aggregate demand.

We know the following about a closed economy: • Taxes: T = 20 . Government spending: G = 20 • Consumption: C = 10 + 0.6(Y - T) where Y denotes the GDP. We also know that investment is constant but we ignore its value. One day, the government initiates a Keynesian stimulus to support the economy. It increases spending to 40. To avoid a big increase in public debt, it also increases taxes to 30.   What is the variation of GDP? Select one: a. It increases by 30 b. It increases by 35. c. It increases by 40 d. It increases by 50

List what specific, deliberate actions the federal government could take to enact expansionary fiscal policy.

The Classics believed money wage cuts could restore full employment; Keynes argued that such cuts would make unemployment worse. Explain and Discuss.

Use the table to answer the following questions: Public Debt over Time United States France Italy Belgium Australia France Belgium Australia the United States 2001 Debt $3.3 trillion $0.9 trillion $1.5 trillion $0.3 trillion $0.2 trillion According to the table, which country appeared to be in the worst fiscal shape in 2012? Italy GDP $10.2 trillion $1.5 trillion $1.2 trillion $0.3 trillion $0.7 trillion 2011 Debt $12.2 trillion $1.8 trillion $1.7 trillion $0.3 trillion $0.4 trillion GDP $15.0 trillion $2.0 trillion $1.6 trillion $0.4 trillion $1.4 trillion

Discuss three reasons why the use of fiscal policy to stabilize the economy is more complicated than suggested by the basic Keynesian model.

Which of the following statements about automatic stabilizers in Canada is the most accurate? They are the responsibility of the provinces since they, unlike the federal government, do not face lag problems. They are controlled by the Bank of Canada to help manage the business cycle. They are able to completely eliminate all the lag problems associated with fiscal policy. They are changes in government transfer payments and tax revenues that vary automatically and inversely to business cycle changes.

According to Keynesian economics, what impact would a balanced budget amendment to the constitution requiring the federal government to balance its budget annually have on the economy?