MACROECONOMICS FOR TODAY
10th Edition
ISBN: 9781337613057
Author: Tucker
Publisher: CENGAGE L
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Chapter P4, Problem 12KC
To determine
The reason why the automatic stabilizers lean against the prevailing wind of business cycles.
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Week Six Discussion Questions
Provide 2 substantive postings to each of the 3 Discussion
Question's:
3. Explain the tools of government spending and tax
policy as they relate to fiscal policy.
Changing Budget Priorities) What spending category claimed the largest share of federal outlays during the 1960s? How about during the most recent decade?
Question: Counter-cyclical fiscal policy involves: A) Keeping government spending and taxes constant over the business cycle B) Increasing government spending and cutting taxes during a downturn, and reducing spending/increasing taxes during a boom C) Always increasing government spending regardless of the economic condition D) Focusing on long-term structural reforms without immediate economic stimulus'
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- Question: Expansionary fiscal policy is characterized by: A) Increased government spending and/or lower taxes B) Decreased government spending and/or higher taxes C) Stable government spending and constant tax rates D) Unchanged government spending but reduced tax ratesarrow_forwardQuestion: "In a hypothetical economy, the government implements a fiscal stimulus package by increasing public spending on infrastructure projects. At the same time, there is a significant rise in consumer savings rates. Discuss the potential short-term and long- term impacts of these simultaneous events on the economy's aggregate demand, interest rates, and inflation. Consider how these changes might affect the effectiveness of the fiscal stimulus in achieving its intended economic objectives."arrow_forward
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