ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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- E4arrow_forwardWhat is discretionary fiscal policy? What are automatic stabilizers? Give examples of each. (Type out the correct answer ASAP with proper explanation of the it within 40 min.will give upvote only for the correct information. So .... Thank you in adv.)arrow_forwardPlease no written by hand and no emage In South Africa explain the following Explain the risks associated with the use of Tax Expenditure Subsidies as a substitute for direct expenditure programmes Describe the role of fiscal policy as a discrete objective of Government Describe the fiscal policy areas of intervention and the strengths and weaknesses of alternative approaches Analyse the manner in which tax, expenditure and government borrowing interact in affecting macroeconomic outcomes Compare the competing views on the relationship between fiscal policy and the achievement of inclusive growth (i.e. addressing inequality and unemployment)arrow_forward
- In the first quarter 2020, the unemployment rate in the Gaza Strip reached to 69% due to COVID 19. If the Palestinian government decided to solve this problem by an expansionary fiscal policy. Explain the impacts of this policy on the interest rate and aggregate output? Using graph?arrow_forwardAttempts 10. Crowding out effect Keep the Highest/2 Suppose economists observe that an increase in government spending of $13 billion raises the total demand for goods and servic If these economists ignore the possibility of crowding out, they would estimate the marginal propensity to consume (MPC) to be Now suppose the economists allow for crowding out. Their new estimate of the MPC would be than their initial one. Grade It Now 3/4 1/4 4 52 billion. Save & Continuearrow_forward• S = -1250 + 0.4 Y, I= 750 – 1600i | • Ms= 1100, Mt = 0.15Y and Mp = 0.10 Y %3D A. Calculate Y eq, S, I, Mt, Mp and Msp. • B. If the government expenditure increase = 80, calculate the effectiveness of this policy. %3D • C. Draw the graph.arrow_forward
- 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.arrow_forwardSuppose there were an increase in Government spending of $100 billion. The MPC is 75 andthe tax rate is 2. No. imports a. What is the net impact on the economy if the crowding out effect is equal to $20 billion?b. What if the crowding out effect is $60 billion7c. Which of the two scenarios corresponds to the reaction of an economy which is closer to fullemployment? Explainarrow_forward01. Which ff the following reasons why fine-tuning the economy is not likely to be successful, is not really a problem for fiscal policy? O (a) Recognition lag (b) Policy lag O (c) Implementation lag (d) Impact lag (0) Both (a) and (b)arrow_forward
- a. The Covid-19 pandemic has signifigantly effect the economy around the world and the suitable policy to be implemented is expansionary fiscal policy. Suppose the government is focusing more on tax component instead of the other components. Explain in details how tax can impact both aggregate demand and aggregate supply in this situation. Give an example of each. b. If actual employment is lesser than full employment, what fiscal policy actions could eliminate the gap? Is there any possible new problem will occur with the policy taken by the government to eliminate the gap? Illustrate and explain what adjustments, if any, take place?arrow_forwardAsaparrow_forwardse. uestion 27 A decrease in taxes is one way to pursue a contractionary fiscal policy because it will make government revenues contract. O A. true. O B. false.arrow_forward
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