in the dynamic model of AD-AS in the figure to the right, if the economy is at point A in year 1 and is expected to go to point 8 in year 2, Congress and the president would most likely pursue OA expansionary fiscal policy. OB expansionary automatic stabilizers OC. contractionary fiscal policy OD. contractionary monetary policy OE expansionary monetary policy

in the dynamic model of AD-AS in the figure to the right, if the economy is at point A in year 1 and is expected to go to point 8 in year 2, Congress and the president would most likely pursue OA expansionary fiscal policy. OB expansionary automatic stabilizers OC. contractionary fiscal policy OD. contractionary monetary policy OE expansionary monetary policy

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Explain how is fiscal expansion generally leads to income expansion in a normal IS-LM framework and I how to deal with the money that will increase, causing interest rates to rise and changing the composition of output in a normal IS-LM framework?
Consider the basic AD/AS model, and suppose there is a positive output gap. If a contractionary fiscal policy is pursued and the AS curve shifts rightward unexpectedly, the fiscal policy may be potential GDP. and real GDP may A. too strong; fall below B. too strong; stay above C. too weak; fall below D. too weak, stay above O E. appropriate; equal
a. What is the role of aggregate demand in eliminatingthe GDP gap? How does the slope of the AS curveaffectthe fiscal policyactions necessary to eliminatethe GDP gap?b. Define and give three examples of automaticstabilizers.c. How can a larger government fiscal deficit cause alarger international trade deficit?
When the economy is in a recession, taxes decrease while spending increases and, as a result of this automatic fiscal policy, aggregate demand O induced; discretionary; is not changed O induced; needs-tested; increases O discretionary; induced; is not changed O discretionary; needs-tested; increases O needs-tested; induced; decreases
Give me correct answer and full explanation and don't use chatGPT otherwise I give downvote
2
During the current global pandemic, the governments of all major economies searched for policy responses to dampen the negative impacts to the economy. In general, governments are aiming to shift the AS curve to the right through large increases in government spending. increase potential GDP. O shift the AD curve to the right through large increases in government spending and tax transfers. Opush up the factor prices.
4
(Figure: Fiscal Policy Options) Use Figure: Fiscal Policy Options. If the aggregate demand curve is AD': Price level LRAS SRAS AD" AD
Which statement is CORRECT? A) Automatic stabilizers indicate deliberate action by policy makers. O B) Discretionary fiscal policy shows automatic adjustments without any specific effort by policy makers. C) Discretionary fiscal policy indicates deliberate action by policy makers. Automatic stabilizers are risky tó use and sometimes can get the economy D) destabilized.
Please do questions D-F. Thanks
Figure 16-7 Price level P3 a P₂ P₁ 0 LRAS A increase taxes LRAS 8 с Y₂ Ya contractionary fiscal policy O increase government spending O decrease interest rates SRAS₁ AD₁ SRAS AD₂ Refer to Figure 16-7. Given that the economy has moved from A to B in the graph above, which of the following would be the appropriate fiscal policy to achieve potential GDP? Real GDP (trillions of dollars)