If the government announces that it has increased the corporate tax rate from 25% to 35% and the income tax rate from 20% to 30%, what kind of policy will it follow? A) contractionary fiscal policy B) Supply-side policy C) contractionary monetary policy D) Expansionary monetary policy E) Expansionary fiscal pol

Q: 1. If a government runs a primary fiscal deficit, and has no source of additional revenue other than…

A: Fiscal deficit refers to how much a government's spending exceeds its revenue during a fiscal year.…

Q: 6. A reduction in government expenditure or an increase in taxes is defined as: 1. expansionary…

A: We know that Expansionary policy is employed with the aim of boosting aggregate demand when private…

Q: 12. Using fiscal policy to fight inflation Consider the hypothetical economy depicted on the graph.…

A: Full employement level prevails at : Price level = 110 & Real GDP = $780 billionIn the initial…

Q: The economy is experiencing rapid inflation, pushing above 9%.  Which fiscal policy action should…

A: Fiscal policy is a financial tool in the hands of the government to attain economic goal. It does so…

Q: 8 How is the above stimulus bill going to be financed? According to the (Keynesian) theory in the…

A:

Q: 1. If the government is required to balance the budget and the economy falls into a recession, which…

A: 1. If the government is required to balance the budget and the economy falls into a recession, the…

Q: 9. Use of discretionary policy to stabilize the economy Should the government use monetary and…

A: The contractionary policy must be used as economy is experiencing expansionary gap. It will shift…

Q: 2 - D please

A: The demand curve shows the inverse relationship between price and quantity demanded. The demand…

Q: Interest rates are a key weapon in fiscal policy Select one: a. False b. True

A: Fiscal policy is aimed at affecting the economic activity through fiscal tools. These tools include…

Q: 14) The relationship between monetary policy and the time it takes for policy to change spending is…

A: The monetary policy is the policy of the monetary authority of the economy regarding the money…

Q: According to Classical economists, which type of fiscal policy financing produces "crowding out? a.…

A: Fiscal policy implies the use of government expenditure or tax revenue in order to change the…

Q: Exercise 4 Use a combination of text and drawing of figures when answering the following questions:…

A: Fiscal policy Fiscal policy refers to the policy of the government and central bank of the nation…

Q: 9.Fiscal policy can be called on to correct conditions of recession and inflation.  a.List and…

A:

Q: 7. Use of discretionary policy to stabilize the economy Should the government use monetary and…

A: The short run aggregate supply curve intersects the aggregate demand curve when the output is $25…

Q: _____ are elements of fiscal policy that automatically change when income changes.   a. Budget…

A: Fiscal policy is one of the tools of the government to influence macroeconomic conditions such as…

Q: Suppose the economy is in a recession, which of the following fiscal policy can the government use…

A: A recession is a macroeconomic word for a large drop in overall economic activity in a certain area.…

Q: Match the following terms with their definitions.…

A: From the above information, we will match the following terms with their definitions-

Q: .When an economy has an aggregate expenditure of $150 billion and the real GDP of $140 billion, then…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: 1. The cyclically adjusted surplus as a percentage of GDP is 1 percent in year 1. This surplus…

A: Gross domestic product refers to the market value of final goods and services that are produced…

Q: 1. Given the discussion of the effects of fiscal policy in this​ chapter, if the central bank does…

A: Fiscal policy refers to the use of government disbursement and tax policies to influence economic…

Q: 1. Since 2010, the UK government has made some progress in reducing the budget deficit by…

A: A government generally regulates the market through fiscal measures, the measures can be of two…

Q: 1. What is a minor but important change you would like to see applied to fiscal policy? 2. What is…

A: Here we need to address the changes in fiscal and monetary policy which will increase the…

Q: reduction in government expenditure or an increase in taxes is defined as:

A: Expansionary policy is employed with the aim of boosting aggregate demand when private demand is…

Q: 5. I need help answer please

A: Contractionary fiscal policy:- When the government either slashes expenditure or hikes taxes, it is…

Q: 9. Use of discretionary policy to stabilize the economy Should the government use monetary and…

A: The economy is producing natural rate of output at long run aggregate supply curve.

Q: to 2002 c. 2002 to 2003

A: Contractionary fiscal policy is when the government either tends to raise taxes or cut spending.It…

Q: Increasing government spending

A: Option (B). Government actively increases spending in response to recession, so it's an active…

Q: 10. In order to close an inflationary gap, the government needs to implement which of the following…

A: An inflationary gap, also known as an expansionary gap, refers to the situation in an economy where…

Q: 07. What factors make an expansionary "stimulus" fiscal policy effective?     a) A government…

A: Fiscal stimulus can raise output and incomes in the short run. To have the greatest impact with the…

Q: According to Classical economists, which type of fiscal policy financing produces "crowding out? a.…

A: Crowding out refers to the procedure where increases in government spending decreases other…

Q: For questions 34-39 choose whether each is an example of: fiscal policy a. discretionary b.…

A: Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: 7. Use of discretionary policy to stabilize the economy Should the government use monetary and…

A: Discretionary policy is a macroeconomic policy that is chosen by policymakers' judgement in the…

Q: The following graph shows a hypothetical aggregate demand curve (AD), short-run aggregate supply…

A: The aggregate demand in the economy shows the total amount of commodities that all consumers want to…

Q: 4. The government decides to pursue a policy of keeping the amount of tax revenue it collects to be…

A: Tax revenue alludes to the aggregate sum of money gathered by a government through taxation. It…

Q: 37. What happens when the government temporarily runs a deficit by spending more on public stimulus…

A: Answer: Correct option: (B) The aggregate demand curve moves to the right Explanation: Government…

Q: 33. If an Economy is producing below Potential GDP, the correct form of action is: A. Expansionary…

A: An economy is considered to have an output gap if it is producing less than it could be. The output…

Q: QUESTION The Cyclically Adjusted Budget Balance is an estimate of what the Fiscal Balance would be…

A: "Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: uld the government use monetary and fiscal policy in an effort to stabilize the economy? The…

A: The economy is at its full potential when it is producing at the long run aggregate supply curve,…

Q: 07. What factors make an expansionary "stimulus" fiscal policy effective? One answer     a) A…

A: The fiscal policy refers to a policy which is used to influence the aggregate demand in the economy.…

Q: 1. Suppose the economy has fallen into a recession (output level ?0), and the federal government…

A:

Q: 1. Chapter 17: Using the AA-DD diagram, briefly explain: a. the effects of a temporary decrease in…

A:

Q: 3. Explain how expansionary fiscal policy can close a recessionary gap using an appropriate diagram.…

A: In a recession, aggregate demand (AD) falls below potential GDP, creating a recessionary gap. This…

Q: 20 22 LRAS 24 26 OUTPUT (Trillions of dollars) AS AD 28 30 AD þ AS that in January 2026 the…

A: Government policy is a description of the government's political actions, strategies, and goals in…

Q: of the following are arguments in favor of active stabilization policy by the government? Check all…

A: It can be defined as the policy or some sort of action by the government or central bank of that…

Q: Felix lives in the fictional country of Lindelof, which raises government revenue by taxing everyone…

A: Tax is the compulsory payment that imposed by the government on production, income and profit.

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.