Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN: 9781305506725
Author: James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher: Cengage Learning
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Chapter 11, Problem 6CQ
To determine
Implication of fiscal policy when economy is unstable.
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According to Keynesian economics, which of the following is effective fiscal policy when there is a problem of unemployment?
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According to Keynesian economics, what impact would a balanced budget amendment to the constitution requiring the federal government to balance its budget annually have on the economy?
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Economics: Private and Public Choice (MindTap Course List)
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- In the AS/AD model of the economy, fiscal policy aims to shift which curve?arrow_forwardAccording to Keynesian economics, which of the following is effective fiscal policy when there is a problem of unemployment?a) reduce market prices.b) increase government purchasesc) doubling the money supply.d) reduce interest rates significantly.arrow_forwardAccording to Keynesians, when should the federal government run a budget deficit and when should it run a surplus?arrow_forward
- What are the reasons of fiscal policy not being effective in an economy according to classical economists?arrow_forwardWhen the economy is in a recessionary mode, what will likely be the actions by government using fiscal policy?arrow_forwardUsing the concept in Keynesian economics, which one of the following may not be an effective fiscal policy when there is inflation? a) increasing aggregate demand b) increasing corporate taxes. c) increasing personal taxes. d) decreasing government purchases.arrow_forward
- Analyze fiscal policy in order the generate macroeconomic stability.arrow_forwardAccording to Keynesian economics, what impact would a balanced budget amendment to the constuition requiring the federal government to balance its budget annually have on the economy?arrow_forwardIf stability of the economy is the primary objective of Fiscal Policy, then an Annually Balanced Budget (Government Expenditures = Tax Revenues) is the best policy approach. True or False?arrow_forward
- How did John Maynard Keynes economic theory influence the 20th Century fiscal policy?arrow_forwardHow could fiscal policy alleviate the problem? What specific policy changes would be needed?arrow_forwardAccording to Keynesians, when should the federal government run a deficit and when should it run a surplus?arrow_forward
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