-When Government Spending increases by $10 B Aggregate Demand increases by MORE than $10 B.  Which part of Aggregate Demand (C, I, G, or X?) increases so as to make this ripple effect, or multiplied impact, happen?

Why do Republicans like tax cuts? Why are tax cuts a good thing? How does it affect the aggregate supply and demand graph?

Please answer the question below: If the current real GDP is P700 billion, which of the following policies would bring the economy to potential output? a. increase government spending by P25 billion b. increase government spending by P100 billion c. increase government spending by P20 billion d. decrease government spending by P100 billion   If current real GDP is P700 billion, which of the following policies would bring the economy to potential output? a. decrease taxes by P100 billion b. increase taxes by P100 billion c. decrease taxes by P25 billion d. increase taxes by P25 billion * the attached photo is just connected to the question *

If you have the power to cut or increase taxes in your country with the aim of boosting aggregate demand, which tax will you most likely touch: Value Added Tax (VAT), Income Tax, or Corporate Tax? Will you cut it or will you increase it? Why? Provide a good explanation for your answer using good economic basis.

From the perspective of someone using aggregate-demand and aggregate supplyanalysis, what is the impact of a tax cut when the economy is operating above fullemployment. Is this a wise policy? Why or why not?

3.6

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?

Assume the tax multiplier is estimated to be 1.3 and the aggregate supply curve has its usual upward slope. Suppose the government lowers taxes by $75 million. Aggregate demand will by $ million. (Enter your response rounded to one decimal place.)

please answer the following question: 1.The fact that it takes time for government officials to recognize an economic problem in is one reason for time lags in fiscal policy making. a)true  b)false