Using the AE model, show the economy in equilibrium. Then, show the impact of an increase in taxes to reduce inflation. Would the above be considered expansionary or contractionary fiscal policy? Assume the change in taxes above is $15 billion dollars and MPC = .90. What will be the change in GDP?

The marginal propensity to expend is 0.5 and there is a recessionary gap of $200. What fiscal policy would you recommend? (Assume mpe = mpc) 0000 Expansionary fiscal policy; increase government expenditures by $100, or cut taxes by $200. Contractionary fiscal policy; decrease government expenditures by $200, or cut taxes by $100. Contractionary fiscal policy; decrease government expenditures by $100, or cut taxes by $200. Expansionary fiscal policy; increase government expenditures by $200, or cut taxes by $100.

President Biden is proposing an increase in the corporate income tax rate from 21% to 28%. Although the corporate tax rate will be higher than it is currently, it is still lower than the corporate tax rate of 35% that had been in place since President Clinton. How will this tax increase affect aggregate expenditures, equilibrium GDP and employment? Part of the reason for this proposal is to offset the increased spending from the last three stimulus packages/checks which increased Federal government's debt.  Do you agree with the proposed increase in corporate tax rates? Why or why not? What are some of the costs and benefits of the proposed tax changes? Is this the right time to increase taxes? Why or why not?

Using the AE model, show the economy in equilibrium. Then, show the impact of an increase in government spending to reduce the unemployment rate.Would the above be considered expansionary or contractionary fiscal policy?Assume the change in government spending in above is $25 billion dollars and MPC = .95. What will be the change in GDP?

in another economy, the MPC = 4/5, government needs to increase expenditures $20 to complete a project, but it does not want to increase debt so it increases taxes $20 also. What, if any, will be the change in output generated by this balanced - budget expenditure scenario?

Please solve step by step and quick

The graph below depicts an economy where a decline in aggregate demand has caused a recession. Assume the government decides to conduct fiscal policy by increasing government purchases to reduce the burden of this recession. Fiscal Policy Price Level 160 LRAS AS 140 120 100 80 60 40 20 0 AD 1 AD 80 160 240 320 400 480 560 640 720 800 Real GDP (billions of dollars) Instructions: Enter your answers as a whole number. a. How much does aggregate demand need to change to restore the economy to its long-run equilibrium? $ billion b. If the MPC is 0.6, how much does government purchases need to change to shift aggregate demand by the amount you found in part a? EA billion Suppose instead that the MPC is 0.75. c. How much does aggregate demand and government purchases need to change to restore the economy to its long-run equilibrium? Aggregate demand needs to change by $ billion and government purchases need to change by $ billion.

Suppose the government implements contractionary fiscal policy. As a result, the inflation rate will likely _____ and the real growth rate will likely _____ in the short run. Rise or fall?

Which of the following is an example of fiscal policy? Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a Electing a new member of Congress. Changing G or changing T. C Increasing the amount of money in circulation. d Charging a higher interest rate on mortgages.

Consider the following model: Y=C+I+G, C=c(Y-T), I=i(Y,r) Analyze the effects of expansionary and contractionary fiscal policies and indicate them on a graph.