Which of the following is an appropriate fiscal policy response if the economy is in a state of rising inflation?   Contractionary fiscal policy by decreasing government spending and taxes. Expansionary fiscal policy by increasing government spending and taxes. Contractionary fiscal policy by decreasing government spending and increasing taxes. Expansionary fiscal policy by increasing government spending and lowering taxes.

Q: Fiscal policy determines the level of interest rates.True or False

A: Fiscal policy: It refers to the policy which is used by the government so that it can make…

Q: Which of the following will lead to expansionary fiscal policy? Select all that apply: reduction in…

A: Fiscal policy refers to the use of government spending, and taxation to influence the economy. It is…

Q: Explain and show the consequence for fiscal policy if the marginal propensity to consume is a…

A: Fiscal policies are the public authority made approaches made to control, fortify and support the…

Q: Which of the following is the best example of an automatic stabilizer? O national defense…

A: The automatic stabilizer is a type of fiscal policy (i.e., increases public spending and decreases…

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

A: An automatic stabilizer is a policy in effect at all the time in an economy and works inverse of the…

Q: discuss the economic implications of  Joe Biden’s fiscal stimulus for the US economy and the…

A: The economies around the globe are focused on their development and growth in various areas. The…

Q: Discretionary fiscal policy is policy that permanently changes government spending to slow the…

A: Fiscal policy refers to the use of government taxation and spending to influence and manage the…

Q: Explain how the conduct of fiscal policy affects consumption and investment in equilibrium.

A: Fiscal policy is a macroeconomic policy that is implemented by the government for monitoring and…

Q: Expresses in detail the effects of expansionary and contractionary fiscal policy on income and the…

A: In an economy, fiscal policies are implemented by the government to influence the aggregate demand…

Q: If the economy dips into a recession Question 14 options: automatic stabilizers will cause tax…

A: The employment of government revenue and expenditure measures to sway and stabilize an economy is…

Q: Based on your understanding of the multiplier effect and the crowding-out effects, do you think that…

A: The macroeconomic equilbrium in an economy occurs at the point where the aggregate demand in the…

Q: Classify each statement based on the type of fiscal policy to which it refers. answer bank in image…

A: Expansionary fiscal policy: Expansionary fiscal policy refers to the situation where the government…

Q: Suppose the economy is in a recession.  To combat the recession, Congress has decided to allocate $1…

A: A recession is a temporary period of economic slowdown, generally defined as  a fall in GDP over two…

Q: Fiscal policy of increasing government expenditures can be more potent than monetary policy in…

A: Fiscal policy works through changes in government expenditures and changes in taxes, while monetary…

Q: Identify a change in fiscal policy that will shift the composition of output toward investment.…

A: When a contractionary fiscal policy is adopted, it reduces government spending and raises taxes,…

Q: During a recession, the government decides to give an additional child tax credit to households of…

A: Recession occurs when there is a fall in the aggregate demand in the economy. The fall in the…

Q: Which of the following is NOT a fiscal policy action? Group of answer choices decreasing government…

A: Fiscal policy is used by governments that have an economic influence. Changes in taxation and…

Q: Which of the following are examples of automatic stabilizers? Check all that apply. Personal income…

A: Automatic stabilizers:Automatic stabilizers are the tools that any government uses to fix its…

Q: Which one of the following statements regarding fiscal policy and the budget is (2) correct?  A…

A: Fiscal policy is the use of government spending and taxes to influence the level of money supply in…

Q: Which of the following would be most likely to induce Congress and the president to conduct…

A: Fiscal policy refers to the policy under which the state or government uses instruments such as…

Q: One purpose of discretionary fiscal policy is to Multiple Choice O increase government spending…

A: An economy's overall health can be influenced by a government's tax, spending, and borrowing…

Q: Expansionary fiscal policy refers to (increases, decreases) in government spending or ases,…

A: In expansionary fiscal policy, government cuts tax rates(income tax & corporate tax) and boost…

Q: Fiscal policy of increasing government expenditures can be more potent than monetary policy in…

A: Fiscal and monetary policy: Fiscal policy signifies the policies taken by the government of an…

Q: Which of the following is NOT a fiscal policy action? Group of answer choices decreasing government…

A: The answer is - raising the quantity of money in circulation

Q: Classify the actions as either discretionary spending or an automatic stabilizer. Place each action…

A:

Q: Which type of discretionary fiscal policy is likely to have the smallest overall effect on GDP…

A: Discretionary fiscal policy is the government policy to control economic growth and aggregate…

Q: Which of the following would be classified as fiscal policy?  The federal government passes tax cuts…

A: Answer - Need to find- Which of the following would be classified as fiscal policy  Given in the…

Q: Which is considered expansionary fiscal policy? a)a tax increase for wealthy individuals b)an…

A: Fiscal Policy is  the use of tax policy and the government expenditure that can influence the…

Q: List what specific, deliberate actions the federal government could take to enact expansionary…

A: Expansionary fiscal policy is aimed at increasing aggregate demand when the economy is in a…

Q: Which one of the following propositions would be consistent with a supply-side view of fiscal…

A: Macroeconomics analyzes the economy as a whole. It studies aggregate economic concepts such as…

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

A: Fiscal policy refers to the use of government spending and taxation to influence the overall…

Q: define expansionary and contractionary fiscal policy. explain how expansionary fiscal ploicy can…

A: When the government uses public spending, borrowing, taxation policy, etc. to change or initiate an…

Q: fiscal policy is most effective when combating recessions caused by demand shocks recessions caused…

A: The use of government spending and tax policies to influence economic conditions, especially…

Q: Expansionary fiscal policy , is a fiscal policy used to close a recessionary gap. is a revenue and…

A: Fiscal policy refers to the changes in the federal government purchases and taxes, which are…

Q: Differentiate between the expansionary fiscal policy and contractionary fiscal policy with diagram…

A: Fiscal Policy: Fiscal policy is used to influence aggregate demand and maintain stability in the…

Q: Suppose the economy had been producing at potential output but is now experiencing a recession.…

A: To stimulate the output or control the recessionary forces in the economy government generally…

Q: If a recession persists due to nominal wage and price stickiness (i.e., slow adjustment of nominal…

A: Fiscal policy is set by the government which shows the changes in government spending or taxes.…

Q: In preparing their estimates of the stimulus package's effect on GDP, Obama administration…

A: The government purchases multiplier can be affected by a number of factors, including: The…

Q: Which of the following is an appropriate discretionary (active) fiscal policy if there is a…

A: We need expansionary fiscal policy to close the recessionary gap.

Q: Which of the following might increase the government budget deficit?     contractionary fiscal…

A: Government can have balanced budget, budget deficit or budget surplus. Government imposes tax to…

Q: Which of the following action is a most likely fiscal policy measure for an economy that is in an…

A: Here, the GDP implies the value of all the commodities and services provided in the economy by the…

Q: Explain the following: Neutral fiscal policy, Built in Stabilizer

A: Fiscal neutrality states that fiscal policies by government such as taxing, expenditure, or…