Discretionary fiscal policy impact on recession and inflation.

Question

Want to see more full solutions like this?

Answer 1

Question

Chapter 11, Problem 1SQP

To determine

Discretionary fiscal policy impact on recession and inflation.

Expert Solution & Answer

Explanation of Solution

The discretionary fiscal policy refers to the fiscal policy of the government that is used according to the need of the government. There are two types of fiscal policies that the government can make use according to its discretion. They are the expansionary fiscal policy and contractionary fiscal policy according to the recession and inflation, respectively.

The expansionary fiscal policy includes the measures that increase the money supply in the economy. The expansionary fiscal policy is implemented when the economy is faces a recession. When the policy is implemented, the tax rate will decrease in the economy with increased government spending in the economy. This means that the aggregate demand in the economy will increase and it will shift the AD to the right. As a result, there will be increase in the real GDP of the economy, which will release the economy from the recessionary gap.

The contractionary fiscal policy is introduced at the discretion of the government when the economy moves through the inflation. The contractionary policy includes the increased tax rates as well as decreased government spending. It will decrease the supply of money in the economy, which will result in the leftward shift in the AD curve reducing the inflation and reverting the economy back to equilibrium. Thus, through these ways, the discretionary fiscal policy helps to avoid the recession and inflation in the economy.

Economics Concept Introduction

Fiscal policy: The fiscal policy is the policy of the government regarding the taxation and government spending in order to monitor and regulate the economy of a nation.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

General Accounting Question solution and give me Blank ? C

It is possible to use transformational leadership strategies to reach unethical objectives. Traditional leadership theories and morals standards are not adequate to help employees solve complex organizational issues. For the statement above, argue in position for both in favor or opposed to the statements.

Discuss the preferred deterrent method employed by the Zambian government to combat tax evasion, monetary fines. As noted in the reading the potential penalty for corporate tax evasion is a fine of 52.5% of the amount evaded plus interest assessed at 5% annually along with a possibility of jail time. In general, monetary fines as a deterrent are preferred to blacklisting of company directors, revoking business operation licenses, or calling for prison sentences. Do you agree with this preference? Should companies that are guilty of tax evasion face something more severe than a monetary fine? Something less severe? Should the fine and interest amount be set at a different rate? If so at why? Provide support and rationale for your responses.

Answer 2

Question

Chapter 11, Problem 1SQP

To determine

Discretionary fiscal policy impact on recession and inflation.

Expert Solution & Answer

Explanation of Solution

The discretionary fiscal policy refers to the fiscal policy of the government that is used according to the need of the government. There are two types of fiscal policies that the government can make use according to its discretion. They are the expansionary fiscal policy and contractionary fiscal policy according to the recession and inflation, respectively.

The expansionary fiscal policy includes the measures that increase the money supply in the economy. The expansionary fiscal policy is implemented when the economy is faces a recession. When the policy is implemented, the tax rate will decrease in the economy with increased government spending in the economy. This means that the aggregate demand in the economy will increase and it will shift the AD to the right. As a result, there will be increase in the real GDP of the economy, which will release the economy from the recessionary gap.

The contractionary fiscal policy is introduced at the discretion of the government when the economy moves through the inflation. The contractionary policy includes the increased tax rates as well as decreased government spending. It will decrease the supply of money in the economy, which will result in the leftward shift in the AD curve reducing the inflation and reverting the economy back to equilibrium. Thus, through these ways, the discretionary fiscal policy helps to avoid the recession and inflation in the economy.

Economics Concept Introduction

Fiscal policy: The fiscal policy is the policy of the government regarding the taxation and government spending in order to monitor and regulate the economy of a nation.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 11, Problem 1SQP

To determine

Discretionary fiscal policy impact on recession and inflation.

Expert Solution & Answer

Explanation of Solution

The discretionary fiscal policy refers to the fiscal policy of the government that is used according to the need of the government. There are two types of fiscal policies that the government can make use according to its discretion. They are the expansionary fiscal policy and contractionary fiscal policy according to the recession and inflation, respectively.

The expansionary fiscal policy includes the measures that increase the money supply in the economy. The expansionary fiscal policy is implemented when the economy is faces a recession. When the policy is implemented, the tax rate will decrease in the economy with increased government spending in the economy. This means that the aggregate demand in the economy will increase and it will shift the AD to the right. As a result, there will be increase in the real GDP of the economy, which will release the economy from the recessionary gap.

The contractionary fiscal policy is introduced at the discretion of the government when the economy moves through the inflation. The contractionary policy includes the increased tax rates as well as decreased government spending. It will decrease the supply of money in the economy, which will result in the leftward shift in the AD curve reducing the inflation and reverting the economy back to equilibrium. Thus, through these ways, the discretionary fiscal policy helps to avoid the recession and inflation in the economy.

Economics Concept Introduction

Fiscal policy: The fiscal policy is the policy of the government regarding the taxation and government spending in order to monitor and regulate the economy of a nation.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 11, Problem 1SQP

To determine

Discretionary fiscal policy impact on recession and inflation.

Expert Solution & Answer

Explanation of Solution

The discretionary fiscal policy refers to the fiscal policy of the government that is used according to the need of the government. There are two types of fiscal policies that the government can make use according to its discretion. They are the expansionary fiscal policy and contractionary fiscal policy according to the recession and inflation, respectively.

The expansionary fiscal policy includes the measures that increase the money supply in the economy. The expansionary fiscal policy is implemented when the economy is faces a recession. When the policy is implemented, the tax rate will decrease in the economy with increased government spending in the economy. This means that the aggregate demand in the economy will increase and it will shift the AD to the right. As a result, there will be increase in the real GDP of the economy, which will release the economy from the recessionary gap.

The contractionary fiscal policy is introduced at the discretion of the government when the economy moves through the inflation. The contractionary policy includes the increased tax rates as well as decreased government spending. It will decrease the supply of money in the economy, which will result in the leftward shift in the AD curve reducing the inflation and reverting the economy back to equilibrium. Thus, through these ways, the discretionary fiscal policy helps to avoid the recession and inflation in the economy.

Economics Concept Introduction

Fiscal policy: The fiscal policy is the policy of the government regarding the taxation and government spending in order to monitor and regulate the economy of a nation.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 11, Problem 1SQP

To determine

Discretionary fiscal policy impact on recession and inflation.

Expert Solution & Answer

Explanation of Solution

The discretionary fiscal policy refers to the fiscal policy of the government that is used according to the need of the government. There are two types of fiscal policies that the government can make use according to its discretion. They are the expansionary fiscal policy and contractionary fiscal policy according to the recession and inflation, respectively.

The expansionary fiscal policy includes the measures that increase the money supply in the economy. The expansionary fiscal policy is implemented when the economy is faces a recession. When the policy is implemented, the tax rate will decrease in the economy with increased government spending in the economy. This means that the aggregate demand in the economy will increase and it will shift the AD to the right. As a result, there will be increase in the real GDP of the economy, which will release the economy from the recessionary gap.

The contractionary fiscal policy is introduced at the discretion of the government when the economy moves through the inflation. The contractionary policy includes the increased tax rates as well as decreased government spending. It will decrease the supply of money in the economy, which will result in the leftward shift in the AD curve reducing the inflation and reverting the economy back to equilibrium. Thus, through these ways, the discretionary fiscal policy helps to avoid the recession and inflation in the economy.

Economics Concept Introduction

Fiscal policy: The fiscal policy is the policy of the government regarding the taxation and government spending in order to monitor and regulate the economy of a nation.

Answer 6

Chapter 11, Problem 1SQP

To determine

Discretionary fiscal policy impact on recession and inflation.

Expert Solution & Answer

Explanation of Solution

The discretionary fiscal policy refers to the fiscal policy of the government that is used according to the need of the government. There are two types of fiscal policies that the government can make use according to its discretion. They are the expansionary fiscal policy and contractionary fiscal policy according to the recession and inflation, respectively.

The expansionary fiscal policy includes the measures that increase the money supply in the economy. The expansionary fiscal policy is implemented when the economy is faces a recession. When the policy is implemented, the tax rate will decrease in the economy with increased government spending in the economy. This means that the aggregate demand in the economy will increase and it will shift the AD to the right. As a result, there will be increase in the real GDP of the economy, which will release the economy from the recessionary gap.

The contractionary fiscal policy is introduced at the discretion of the government when the economy moves through the inflation. The contractionary policy includes the increased tax rates as well as decreased government spending. It will decrease the supply of money in the economy, which will result in the leftward shift in the AD curve reducing the inflation and reverting the economy back to equilibrium. Thus, through these ways, the discretionary fiscal policy helps to avoid the recession and inflation in the economy.

Economics Concept Introduction

Fiscal policy: The fiscal policy is the policy of the government regarding the taxation and government spending in order to monitor and regulate the economy of a nation.

Answer 7

Chapter 11, Problem 1SQP

To determine

Discretionary fiscal policy impact on recession and inflation.

Answer 8

Expert Solution & Answer

Explanation of Solution

The discretionary fiscal policy refers to the fiscal policy of the government that is used according to the need of the government. There are two types of fiscal policies that the government can make use according to its discretion. They are the expansionary fiscal policy and contractionary fiscal policy according to the recession and inflation, respectively.

The expansionary fiscal policy includes the measures that increase the money supply in the economy. The expansionary fiscal policy is implemented when the economy is faces a recession. When the policy is implemented, the tax rate will decrease in the economy with increased government spending in the economy. This means that the aggregate demand in the economy will increase and it will shift the AD to the right. As a result, there will be increase in the real GDP of the economy, which will release the economy from the recessionary gap.

The contractionary fiscal policy is introduced at the discretion of the government when the economy moves through the inflation. The contractionary policy includes the increased tax rates as well as decreased government spending. It will decrease the supply of money in the economy, which will result in the leftward shift in the AD curve reducing the inflation and reverting the economy back to equilibrium. Thus, through these ways, the discretionary fiscal policy helps to avoid the recession and inflation in the economy.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Economics Concept Introduction

Fiscal policy: The fiscal policy is the policy of the government regarding the taxation and government spending in order to monitor and regulate the economy of a nation.

Answer 12

Ch. 11.3 - Prob. 1YTE Ch. 11 - Prob. 1SQP Ch. 11 - Prob. 2SQP Ch. 11 - Prob. 3SQP Ch. 11 - Prob. 4SQP Ch. 11 - Prob. 5SQP Ch. 11 - Prob. 6SQP Ch. 11 - Prob. 7SQP Ch. 11 - Prob. 8SQP Ch. 11 - Prob. 9SQP

Discretionary fiscal policy impact on recession and inflation.

Discretionary fiscal policy impact on recession and inflation.

Explanation of Solution

Want to see more full solutions like this?

Chapter 11 Solutions