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- D₂ Which of the following movements would be consistent with the government budget going from deficit to surplus and the simultaneous enactment of an investment tax credit? O a movement from Point A to Point C a movement from Point B to Point A O a movement from Point B to Point F a movement from Point C to Point BIn the United States, from the most recent fiscal data we reviewed in class, total government spending is roughly 39% of GDP; yet, using the expenditure method for calculating GDP, government expenditures on goods and services were only 17% of GDP. Which of the following most likely explains the difference? Select one: O a. Transfer payments are included in the second figure, but not the first one. O b. Transfer payments are included in the first figure, but not the second one. O c. Military (i.e. defense) spending on goods and services is included in the second figure, but not the first one. O d. Military (i.e. defense) spending on goods and services is included in the first figure, but not the second one.The government will have flexibility in implementing countercyclical fiscal policy when the outstanding stock of government debt is relative to the size of GDP. O a. Total; large. O b. More; small. O c. Less; insignificant. O d. More; large. O e. Less; small.
- QUESTION 1 A new machine is to be purchased for $200,000. The company believes it will generate $75,000 annually in revenue due to the purchase of this machine. The company will have to train an operator to run this machine and this will result in additional labor expenses of $25,000 annually. The new machine will be depreciated using 5 years MACRS, even though the life of the project is 7 years, and the salvage value is estimated to be $0 at the end of year 7. The tax rate is 40% and the company's MARR is 15%.Which of the following could NOT be expansionary fiscal policy tool? A )increasing money supply B) 3 ) increasing government expenditure O c) decreasing taxes O D) increasing transfer payments6. Use the following table to answer these questions: Y C I G X $ 500 $ 500 $ 10 $ 20 $ 60 $ 600 $ 590 $ 10 $ 20 $ 40 $ 700 $ 680 $ 10 $ 20 $ 20 $ 800 $ 770 $ 10 $ 20 $ 0 $ 900 $ 860 $ 10 $ 20 - $ 20 $ 1,000 $ 950 $ 10 $ 20 - $ 40 a.What is the Marginal Propensity to Import? b.What is the Marginal Propensity to Invetst? c.What the difference between both of…
- Refer to the figure at right. Government policy that moved the economy from A to B would be accomplished by O A. an expansionary fiscal policy combined with a contractionary monetary policy. O B. OC. a contractionary fiscal policy combined with an expansionary monetary policy. a contractionary policy that would reduce the rate of inflation and would cause workers to remain unemployed longer than they were before. O D. raising the minimum wage. Inflation Rate 2.5 A B I 6 D Unemployment RateAn expansionary fiscal policy that takes the form of an increase in government purchases carries the possibility that private investment and, as a result, the future growth rate of O a. Is crowded out, potential output is reduced. O b. Rises to an unsustainable level; real GDP is reduced. O c. Increases, net exports increases. O d. Is crowded out; corporate tax revenue is reduced. e Increases, aggregate demand increases.The government might be encouraged to finance its debt through seigniorage because: a. printing money reduces the price level and thus reduces the real value of government debt. O b. seigniorage is widely considered the best solution to huge fiscal problems. O C. None of the other choices are correct. O d. it is easier to print money when the central bank does not accommodate the government's deficit.
- The difference between total federal debt issued and total federal debt "held by the public" is which of the following? O Federal debt held by foreigners. Federal debt held by the fed for use in monetary policy. Federal debt held by international organizations. Federal debt held by government agencies.The crowding-out effect is the tendency for a government budget deficit to raise the and investment. O A. price level; increase O B. real interest rate; decrease O C. quantity of output; increase O D. real wage rate; decrease Click to select your answer. 888 :二。 F7 F6Question 2 to search Fiscal policy includes all of the following, except: O Borrowing Transfer payments (TP) wages Government purchases (G) Taxes (T) Moving to another question will save this response. e L II F5 F6 O G