Suppose that the economy is currently operating at full employment as depicted in the graph to the right. Using the line drawing tool, show the effect on the economy if it were to run a federal budget deficit due to expansionary fiscal policy. Properly label this line. Carefully follow the instructions above, and only draw the required objects. Thus, in the short-run the economy will experience OA. an inflationary gap. B. higher unemployment. C. a recessionary gap. OD. deflation.

can you explain this for me? this is a true or false statement: "increasing welfare payments by borrowing the money to fund them would increase AD" borrowing the money means we will have more deficit and interest to repay. But wouldnt it still stimulate the economy nonetheless?

Read Eye on Booms and Busts. Explain why the NBER reported that the 2008 recession began before real GDP had fallen for two successive quarters. The NBER Committee OA. anticipated the recession was going to happen because real GDP clearly peaked in 2007 OB. based its decision on peaks in the data on real personal income, real manufacturing, wholesale and retail sales, industrial production, and employment, which all peaked between November 2007 and June 2008 OC. made an error because a recession cannot occur unless real GDP falls for two successive quarters O D. saw that the business cycle trough occurred in the second quarter of 2009, so it was obvious that the recession began in 2008

Give me correct answer with full explanation and Don't use chatGPT otherwise I give multiple downvote

The graph below depicts an economy where an increase in aggregate demand has caused Inflation. Assume the government decides to conduct fiscal policy by changing taxes to bring Inflation under control. Price Level 160 150 140 130 120 110 100 90 80 70 60 50 Fiscal Policy LRAS AS Real GDP (billions of dollars) AD₁ AD 40 80 160 240 320 400 480 560 640 720 800 Instructions: Round your answers to 2 decimal places. If you are entering a negative number include a minus sign. a. How much does aggregate demand need to change to restore the economy to its long-run equilibrium? billion b. If the MPC is 0.75, how much do taxes need to change to shift aggregate demand by the amount you found in part a? $ billion Suppose Instead that the MPC is 0.5. c. How much does aggregate demand and taxes need to change to restore the economy to its long-run equilibrium? Aggregate demand needs to change by $ billion and taxes need to change by $ billion.

An economy is in long-run macroeconomic equilibrium when each of the following aggregate demand shocks occurs. What kind of gap - inflationary or recessionary - will the economy face after the shock, and what type of fiscal policies would help move the economy back to potential output? How would your recommended fiscal policy shift the aggregate demandcurve? (Note: you do not need to draw anything).(a) A stock market boom increases the value of stocks held by households.(b) Firms come to believe that a recession in the near future is likely.(c) Anticipating the possibility of war, the government increases its purchases of military equipment.(d) The quantity of money in the economy declines and interest rates increase.

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What happens if there is an increase in the budget deficit? O O Raise the real Interest rate and decline the quantity of loanable funds demanded for Investment Lower the real Interest rate and decrease the quantity of loanable funds demanded for Investment. Lower the real Interest rate and increase the quantity of loanable funds demanded for Investment. Raise the real Interest rate and increase the quantity of loanable funds demanded for Investment. Reset Answer

indentified Qe but not the rest

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