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.

Q: (a) Assuming an economy is experiencing inflation, what are discretionary fiscal policy options that…

A: Macroeconomic analysis offers a comprehensive picture of an economy's financial landscape. It…

Q: 2. Is each of the following policies an example of expansionary or contractionary fiscal policy?…

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Q: When there is a recession you need __________ fiscal policy. When there is inflation you need…

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Q: During a recession, progressive income tax rates act as an automatic stabilizer by O decreasing the…

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Q: All of the following are automatic fiscal stabilizers EXCEPT O a congressionally mandated decrease…

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Q: Assume the economy is operating at less than full-employment output and the federal budget is…

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Q: Suppose that you are a member of the Council of Economic Advisers. The president has asked you to…

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Q: 1) Define MPC(marginal propensity to consume) and MPS(marginal propensity to save) 2) Define…

A: Since you have posted multiple independent questions in the same request, we will solve the first…

Q: One argument often heard against using fiscal policy to tame the business cycle is that the lags…

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Q: If counter-cyclical fiscal policy causes crowding-out, which of the following statements is correct?…

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Q: The use of fiscal policy to end recessions is limited because O The level of taxes is not always…

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Q: 55)If the real GDP and Price level both decreased, the following must have occurred: Select one: a.…

A: In contractionary fiscal policy, the government cut down the expenditure or increases the tax. A…

Q: (i) Explain the difference between discretionary fiscal policy and the automatic fiscal policy. (ii)…

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Q: Select one: a. are generally shorter than monetary policy lags. b. are generally longer than…

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

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Q: Suppose the economy is in recession. Policymakers estimate that aggregate demand is $100 billion…

A: Given InformationAggregate Demand = 100MPC = 0.75Now, Multipler = 1/(1 - 0.75)…

Q: Expansionary fiscal policy refers to the​ ________ to increase real GDP.     A. Federal​ Reserve's…

A: Expansionary Fiscal policy is the policy of the government where government increases government…

Q: To lower output, the federal government engages in _____ fiscal policy, which _____ government…

A: This can be defined as a concept that shows the continuous progress in any nation it does not happen…

Q: 12. What is the purpose of the following fiscal policies? a. Contractionary b. Expansionary fiscal…

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Q: 2. The graph below shows the AD-AS diagram for Canada. 1200+ 1100+ 1000 AD 900 800 - 700+ 600 +…

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Q: 1. Discretionary fiscal policy is the direct result of deliberate actions by policy makers rather…

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Q: Suppose the government decide to use fiscal policy to close the output gap. The marginal propensity…

A: here we calculate the change of government spending require to close the GDP output , by using the…

Q: a) How can the government use fiscal policy during a downturn to stimulate the economy?

A: Fiscal policy is the use of government tax collection and expenditure to impact the economy of a…

Q: As economies go into recession   a) Government spending will decrease   b) Tax revenue will…

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

Q: The U.S., world's largest economy, went into recession in February of 2020. It has taken a broad…

A: "As per policy, we can provide solutions to the first three subparts. Kindly raise the question…

Q: If the economy is in an expansionary mode just coming out of a recession, in regards to aggregate…

A: If the economy is in expansionary mode, then the government spendings would have been high or the…

Q: How will a contractionary fiscal policy affect a budget deficit? A.) Debts will…

A: Budget deficit refers to the amount of expenditure of a government that surpasses/exceeds the total…

Q: 10. Describe the characteristics of fiscal policy from 2000 to 2018. a. From 2000 to 2004, fiscal…

A: since you have asked a multipart question and according to our policy we can only solve the first 3…

Q: Suppose the government increases spending to fund tuition assistance for qualified college students.…

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Q: What is the potential trade-off between using fiscal policy to stimulate economic growth and…

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Q: (c) The Bank of England has a target of keeping inflation at 2%. Central banks around the world that…

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Q: Question: Which of the following is an example of a fiscal policy that has no inside lag? a- A…

A: Fiscal policy- there is a change in government expenditure and taxes to impact the money supply.…

Q: There is a chemical factory located in the upstream river and it dumps its poisonous waste into the…

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Q: Several problems of timing may arise in connection with fiscal policy. Which of the following is not…

A: There are some limitations of the fiscal policy(FP). The main limitation is that the policy includes…

Q: Which of the following could NOT be contractionary fiscal policy tool? OA) decreasing government…

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Q: Suppose the economy has unemployment level close to 15%. A proper fiscal policy might be which of…

A: Unemployment occurs when people who are able, willing and looking for jobs are unable to find jobs.…

Q: Crowding out effect refers to government fiscal policy tools affecting _____? A. private spending B.…

A: Crowding out is the elimination of spending of some private spending due to increase in public…

Q: ocial Security and Medicare create a fiscal gap because _______.     A. the benefits today exceed…

A: Fiscal gap refers the difference between government expenditure and government revenue

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Q: In a recession, needs-tested spending ________ and induced taxes ________. increases; increase…

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Q: The suitable combination of fiscal policy during the high risk of COVID-19 pandemic is I. increased…

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Q: A fiscal Policy that seeks to promote stability and economic growth through tax cuts is? a)…

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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.