Which of these statements about automatic stabilisers is true? a) They eliminate the fluctuations associated with the business cycle b) They form part of discretionary fiscal policy c) They come into play as soon as aggregate demand fluctuates d) They eliminate fiscal drag

Q: When there is a problem of a delay in terms of implementation of the fiscal policy, that would be…

A: Fiscal policy refers to the employment of presidency spending and tax policies to influence economic…

Q: Q11. For various reasons, fiscal policy changes automatically when output and employment fluctuate.…

A: Recession: - it is an economic condition where the overall economic activity declines in an economy.

Q: Another part of the initial fiscal response to the Covid-19 recession were checks sent to every ad…

A: Another part of the initial fiscal response to the Covid-19 recession were checks sent to every…

Q: Q6. How does fiscal policy affect the economy?

A: Answer: Fiscal policy: fiscal policy refers to the policy of government in which the government…

Q: please answer the following question: 1. Automatic stabilizers: A) work without the need for…

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Q: Fantasyland be characterised by the following relations (all units are in millions of domestic…

A: The IS-LM framework is a macroeconomic model illustrating the connection between the interest rate…

Q: As discussed in the class, discretionary policies are the actions the administration takes in order…

A: The macroeconomic policies that are formulated in the wake of the changes in the economy, by the…

Q: Initially, there is no output gap and inflation expectations are 2%. Then, expansionary fiscal…

A: GIVEN   Initially, there is no output gap and inflation expectations are 2%. Then, expansionary…

Q: Entitlement spending is Group of answer choices is another word for Discretionary Spending required…

A: Entitlement services like medicaid and medicare, as well as necessary interest payments on the…

Q: Suppose the economy is in equilibrium at point B which is below the full-employment output of point…

A: Macroeconomics examines the working, composition, and dynamics of an economy. AD/AS model is used…

Q: True/False 1) Unemploymen benefits are an example of fiscal policy.2) According to Ricardian…

A: A transfer payment is a redistribution of income facilitated by the government of an economy as it…

Q: Q1. Consider the following policy mix. The government wants to decrease its budget deficit, whereas…

A: Approach to Solving the Questions:1. Understand the IS-LM Framework:Grasp the concept of equilibrium…

Q: ontrast the effectiveness of fiscal policy in the BKM and AD-AS models.

A: The aggregate demand curve shows the inverse relationship between interest rate and the total…

Q: Discretionary fiscal policy includes Mumple Choice automatic stabzers ta decisions from previous…

A: Governments can react more aggressively to changing economic conditions when they can implement…

Q: Expansionary fiscal policy will: a shift the aggregate demand curve left. b shift the aggregate…

A: Fiscal Policy refers to the policy that the government undertakes to either increase economic growth…

Q: When supply-side economists propose cuts in tax rates, most mainstream economists are likely to take…

A: Supply-side economics argues that tax cuts stimulate economic growth by:increasing disposable income…

Q: Which of the following is/are examples of expansionar fiscal policy A) An increase in taxes B) An…

A: The fiscal policy is mainly concerned with the tax rates and the government spending, while monetary…

Q: 10.2 In which of the following circumstances is expansionary fiscal policy more likely to lead to a…

A: Answer: (10.2). The fiscal policy is more likely to lead to a short-run increase in investment when…

Q: A Fiscal Stimulus Program to Fight the Corona Crisis? The German government wants to decide about…

A: Equilibrium income is established at a point where the sum of all spending matches with the income…

Q: Consider the following economy populated by a government and a representative household. There is no…

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Q: A government spends $500,000 as an expansionary fiscal policy. The spending multipler is 2. a) if…

A: Changes in the price level, affects the spending multiplier.

Q: Automatic stabilizers   a)increase consumption during a recession above what it would otherwise be…

A: Automatic stabilizers work to maintain the equilibrium in the economy.  Too much of inflation or…

Q: 36) An automatic fiscal stabiliser is      A) a monetary or fiscal policy that aims to smooth out…

A: The business cycle occurs when there is ups and downs in the gross domestic product along its trend…

Q: The second-round effects of expansionary Fiscal Policy when the FED has a binding zero interest rate…

A: a) decrease in investment, shift down of AE (aggregate expenditure) and decrease in income: An…

Q: If the simple Keynesian macroeconomic model is used to explain expansionary fiscal policy, which of…

A: The theory of Keynesian economics states that the government should raise demand to increase growth.…

Q: From an initial long-run equilibrium, if aggregate demand grows slower than long-run aggregate…

A: Aggregate demand is the sum of Consumption, Investment, government spending and net exports. Short…

Q: An economy is operating with an output of $500 billion below its natural level, and fiscal…

A: Given that the economy is operating below the natural level, it is informed in the question is that…

Q: This exercise points to a clear policy dilemma. A fiscal contraction may have desirable long-run…

A: Contractionary fiscal policy is a type of economic policy that is used to slow down an economy that…

Q: Draw an AS-AD model of an economy dealing with an inflationary gap. What is one fiscal policy that…

A: Aggregate demand refers to the total expenditure incurred by all the sectors of an economy during a…

Q: On the following graph, AD1 represents the initial aggregate demand curve in a hypothetical economy,…

A: a) Based on the graph, the initial short-run equilibrium level of real GDP is $10 trillion and the…

Q: following statements are TRUE?

A: Automatic stabilisers works automatically like progressive taxation etc while discretionary policy…

Q: n Paynia  the marginal propensity to consume is .6.  Times are tough and the economy is operating on…

A: Aggregate demand is the sum of consumption, investment, government spending, and net exports.  There…

Q: Draw an aggregate demand/aggregate supply graph of an economy in a Recessionary

A: Hey, thank you for the question, since there is multiple question posted, according to our policy we…

Q: Exhibit 24-1 shows the short run and long run equilibrium in an aggregate demand-aggregate supply…

A: Equilibrium real GDP is produced at the intersection of aggregate demand and aggregate supply…

Q: Based on the figure above, an appropriate fiscal policy solution to move the economy towards full…

A: It can be defined as the negative gap between the actual level of the output of the economy and the…

Q: Which of the following statements about automatic stabilizers in Canada is the most accurate? They…

A: Automatic stabilizers are the features of the budget or the ongoing government policies that will…