Explain the following: Neutral fiscal policy, Built in Stabilizer

Q: Fiscal policy determines the level of interest rates.True or False

A: Fiscal policy: It refers to the policy which is used by the government so that it can make…

Q: Distinguish between automatic fiscal policy and discretionary fiscal policy. What type of fiscal…

A: Fiscal policy refers to the government policy regarding tax and government spending which stabilizes…

Q: If government policy makers were worried about the inflationary potential of the economy, which of…

A: When government worried about inflation, it can use contractionary fiscal policy to reduce the…

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: Which of the following is the best example of an automatic stabilizer? O national defense…

A: The automatic stabilizer is a type of fiscal policy (i.e., increases public spending and decreases…

Q: discuss the economic implications of  Joe Biden’s fiscal stimulus for the US economy and the…

A: The economies around the globe are focused on their development and growth in various areas. The…

Q: Why is crowding out an important issue in the debate over the use of fiscal policy?

A: Crowding out effect is an economic situation where interest rates are increased. This ends up  in…

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: Under which condition the fiscal policy has the maximum effect on real national income? Sketch graph…

A: Fiscal policy, measures used by governments to stabilize the economy, specifically by manipulating…

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: Discretionary fiscal policy lead Select one: a) Economic recession b) Economic Inefficiency c)…

A: At the marketplace, discretionary fiscal policy is when government make changes in its spending or…

Q: Based on your understanding of the multiplier effect and the crowding-out effects, do you think that…

A: The macroeconomic equilbrium in an economy occurs at the point where the aggregate demand in the…

Q: Discuss one likely affect of fiscal policy financed via the accumulation of additional government…

A: Fiscal policy is related to government spending and use of taxes as well as subsidies for the…

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: Under what conditions is expansionary fiscal policy the most effective at increasing output? Why?

A: Expansionary fiscal policy is the policy which is to be used to push back the equilibrium normal…

Q: Fiscal policy is a plan for taxing and spending that is designed to steer an economy in a desired…

A: Fiscal policy is the policy of the government that is used to shift the aggregate demand curve.…

Q: 11.1 Due to the pandemic, the federal government announced many measures to help those negatively…

A: Government undertakes fiscal policy to maintain output and inflation in the economy. It refers to…

Q: Identify and explain the fiscal policy implementation issues in detail along with relevant example.

A: Fiscal policy implies the use of government spending and taxation to influence the economy's overall…

Q: amp program. changing the tax laws to increase the marginal tax rates. the indexation of social s

A: Automatic stabilizers are the measures of fiscal policy that are designed to stabilize the…

Q: What is the main advantage of automatic stabilizers over discretionary fiscal policy?

A: Fiscal policy(FP) tools can be implemented in two types that are automatic stabilizers and…

Q: The above figure shows the market for blouses. The government decides to impose the sales tax on…

A: $10,000 (Option B)

Q: Explain the Expansionary and Contactionary Fiscal Policy with the help of diagram.

A: Fiscal policy is used by the central government of the country or finance ministry of the country to…

Q: Describe the shortcomings of Fiscal Policy. Be as thorough as possible.

A: Fiscal policy is the one where government changes its spending and tax policies in order to achieve…

Q: Please show a diagram showing fiscal stimulus impacting on an economy where household saving is on…

A: Fiscal stimulus is defined as the fiscal policy measures taken by the government to boost the…

Q: Which of the following are examples of automatic stabilizers? Check all that apply. Personal income…

A: Automatic stabilizers:Automatic stabilizers are the tools that any government uses to fix its…

Q: The Government has a $0.8 Trillion Growth target. What fiscal policy should they implement if MPS =…

A: To stimulate growth, government uses expansionary fiscal policy, by increasing spending (G) or…

Q: Is it possible for a country to have a headline fiscal deficit and a primary fiscal surplus? Explain…

A: In an economy, headline fiscal deficit is the government over expenditure when receipts are less…

Q: Which one of the following statements regarding fiscal policy and the budget is (2) correct?  A…

A: Fiscal policy is the use of government spending and taxes to influence the level of money supply in…

Q: Discuss Expansionary Fiscal Policy. Who is responsible for implementing fiscal policy? What may be…

A: Policies are created by the government in order to keep the economy on track and ensure economic…

Q: Which of the following would be most likely to induce Congress and the president to conduct…

A: Fiscal policy refers to the policy under which the state or government uses instruments such as…

Q: Discuss ONE likely effect of fiscal policy financed via the accumulation of additional government…

A: Government borrowings assumes a significant part in government's accounts to meet its the public…

Q: Explain how time lags present an additional problem in fiscal policy.

A: Fiscal policy is policy of expenditure and taxes. Fiscal policy is operated by the government. Lags…

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: Explain fiscal policy and its role in stabilizing economies during recessions.

A: Fiscal policy is an instrumental component in the hands of legislatures to influence a country's…

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…

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.