Macroeconomics
13th Edition
ISBN: 9781337617390
Author: Roger A. Arnold
Publisher: Cengage Learning
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Question
Chapter 18, Problem 4QP
To determine
Acceptability of the statement.
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Students have asked these similar questions
Would you kindly explain the fallacy or mistake in this type of thinking.
Identify the fallacy or mistake in thinking in each of the following statements:
a. Lowering taxes always lowers government revenues.
b. Whenever there is a economic expansion, imports increase.
Should the United States government attempt to operate under a balanced budget? Why, or why not?
Which of the following is NOT a category of fiscal policy?
Government policies regarding the purchase of goods and
services
Government policies regarding taxation
Government policies regarding transfer payments and
welfare benefits
Government policies regarding money supply in the economy
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Similar questions
- Which system of taxes is best? Why does that system is the most effective way for the government to generate revenue and maintain our economy's growth?arrow_forwardThis course is designed to provide an understanding of market economies and the fluctuations they are subject to. With this in mind, please answer the questions that follow. a) Assume the economy is in a recession. Discuss how the government could implement fiscal policy to deal with the recession and the steps by which fiscal policy moves the economy out of the recession (Explain fully). b) Explain how expansionary fiscal policy in the U.S. would affect the economies of other countries.arrow_forwardWhen the economy is in recession, government revenue falls due to a falling tax base. Therefore the proper role of government should be to increase taxes and cut spending so as to balance the Federal budget. Do you agree? Why?arrow_forward
- Describe some fiscal policies that governments are presently using to counter the impact of coronavirus on an economy. Discuss if these policies are more, or less likely, to deliver long-term social equity. Could these policies be used to create more social security/welfare; discuss and compare any negative consequences that these policies could have on an economy and critique the various ways the government could minimise or remove such negative consequences?arrow_forwardIf government increases spending and wants to maintain a balanced budget, it shouldarrow_forwardYou are given data on the following variables in an economy: Government spending 300, Total Investment 200, Net Exports 50, Total Tax Revenue 250, Income tax rate 10%. How much income should been arned by the businesses and the individuals in order for the government to reach a balanced budget?arrow_forward
- What are monetary, fiscal and growth and supply side policies. How can a government utilize fiscal policy to stimulate an economy that is in a recession, or in a debt crisis? In your answer outline two (2) challenges the government may face implementing a fiscal policy measure.arrow_forwardWhy does the budget require a forecast of the economy? Under what circumstances would actual government spending and tax revenue fail to match the budget as approved? kindly explain answers in a simpler way.arrow_forwardDuring an economic _______, there is a decline in economic activity, including falling GDP, rising unemployment, and reduced consumer spending. To combat this, governments often implement _______ fiscal policies to stimulate the economy. A) expansion, contractionaryB) downturn, expansionaryC) boom, contractionaryD) recession, expansionary.arrow_forward
- Which of the following best describes a fiscal policy tool? 1. Government spending II. Government taxes III. Interest rates. IV. Bank lending V. Financial capital markets I and II I and VI III, IV, and Varrow_forwardWhich of the following statements do economists generally disagree on? a) At an average tax rate of 50%, tax revenues are maximized for a government. b) No tax revenues would be collected when average tax rates are 100%. c) At very high average tax rates, increasing tax rates further would decrease tax revenues. d) No tax revenues would be collected when average tax rates are 0%.arrow_forward1. Government expenditures in the United States The first table that follows shows government expenditures as a percentage of GDP for selected years. For the same years, the first table also shows different categories of federal expenditures as percentages of total federal government expenditures. The second table shows government tax revenue as a percentage of GDP for the selected years. The second table also shows different categories of federal tax receipts as percentages of total federal tax receipts. (Source: "U.S. Government Printing Office.") Government Expenditures (GDP %) State and Local 7% 10% 14% Year 1950 1970 2011 Federal 16% 19% 24% Government Tax Receipts (GDP %) State and Year 1950 1970 2011 Federal 14% 19% 15% Local 7% 10% *Including transportation, agriculture, veterans' benefits, international affairs, housing, and so on. 14% Income Security 13% 22% 50% Expenditures as a Share of the Federal Government Budget Education Net Interest on and Health Federal Debt…arrow_forward
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