Expansionary fiscal policy will ________GDP and ________ inflation.a.raise,lowerb.lower,lowerc.lower,raised.raise,raise

The fiscal policy (FP) is a tool in hand of government to regulate and control the economic…

Answered: fiscal policy

Business

Economics

fiscal policy

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter11: Managing Aggregate Demand: Fiscal Policy

Section: Chapter Questions

Problem 4TY

See similar textbooks

Related questions

Q: Which of the following is an example of fiscal policy? a. Fighting the war on terror b. Giving…

A: "Since you have asked multiple questions, we will solve first question for you .. If you want any…

Q: Which fiscal policy would be the most contractionary? a $100 billion decrease in government spending…

A: The fiscal policy represents the use of government spending and taxation. To foster strong and…

Q: a. Calculate the budget deficit in cach ycar by completing column 4. b. Calculate the primary budget…

A: As it is not mentioned that which questions are to be answered, so the answer of first two subparts…

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: If inflation is a major issue in the economy, what would be the correct fiscal policy response from…

A: Government is a higher authority who makes rules and regulations to manage the market activities and…

Q: Write short notes (Draw diagram and give suitable examples as required): i) Fiscal policy and its…

A: Inflation is when the general price level of the economy rises continuously. Fiscal policy is…

Q: Government gains revenue through (Click to select) vand expends money through [Click to select)…

A: The government's main source of earning money is tax collection. Other sources of earning money are…

Q: When the government increases spending (expansionary fiscal policy), inflation and employment are…

A: Fiscal policy refers to the policy that is implemented by the government through tax rates and…

Q: a) What is automatic stabilizer in this context of fiscal policy? Explain with examples

A: (Since you have asked many questions, we will solve the first one for you. If you want any specific…

Q: (Wall Street Journal) “Washington Wire” is a column that appears on the front page of…

A: A price-quantity pair in which the quantity asked equals the quantity delivered is called…

Q: Explain the reasons why lags in fiscal policy can create statements such as this: “The member of…

A: Fiscal policy refers to the one of the types of economic policies, which is implemented by the…

Q: Real GDP Which fiscal policy action MIGHT the government take to move the economy from Point A to…

A: Fiscal policy is the policy in which government either change his spending or change tax levels for…

Q: a discretionary fiscal policy b. automatic stabilizer C. monetary policy d. none of the above a 34.…

A: Discretionary fiscal policy: Government changes the taxes and / or government spending in order to…

Q: Fiscal Policy cannot stabilize the Economy if there is High Unemployment and High Inflation…

A: Contractionary policy will decrease aggregate demand and shift it to the left. This decreases real…

Q: Question: Which of the following is an example of a fiscal policy that has no inside lag? a- A…

A: Fiscal policy- there is a change in government expenditure and taxes to impact the money supply.…

Q: 1. The notion of functional finance says that: the economic function of the President is to maintain…

A: Functional Finance: Functional finance says that the government should not be concerned with…

Q: to 2002 c. 2002 to 2003

A: Contractionary fiscal policy is when the government either tends to raise taxes or cut spending.It…

Q: Suppose the economy has unemployment level close to 15%. A proper fiscal policy might be which of…

A: Unemployment occurs when people who are able, willing and looking for jobs are unable to find jobs.…

Q: Fiscal policy is when changes are made toandto accomplish macroeconomic goals. Select an answer and…

A: Fiscal policy: These are the policy measures that are being introduced by the government of a…

Q: Hello, I would like help with this assignment Thank you Fiscal Policy Assume the economy is in…

A: Fiscal policy is an important macroeconomic policy adopted by the central government to stimulate…

Q: What are the automatic stabilizers in the fiscal policy? How does fiscal policy destabilize the…

A: A policy through which the government tends to adjusts its levels of spending and rates of tax for…

Q: Suppose that an economy faces a pandemic crisis. 1. Graph Aggregate demand and Aggregate supply I…

A: As we know that aggregate demand and aggregate supply curves, of the short-run, are drawn only…

Q: An infrastructure plan more than $1.1 trillion on July 28, 2021 is an example of…

A: The fiscal policy would result in the policy which would result in the policy which would result in…

Q: Increasing the public debt can be associated with an expansionary fiscal policy. an expansionary…

A: Fiscal Policy refers to government's use of taxes, spending, and transfer payments to motivate the…

Q: Which of the following Government agents are responsible for carrying out Fiscal Policy? Select an…

A: In Keynesian macroeconomics, aggregate demand plays a very important role. The change in aggregate…

Q: Assume and economy is in recession and the government is considering using fiscal stimulus measures…

A: a) As the government spending increases, our GDP will increase. Fiscal stimulus will shift IS curve…

Q: (a) (i) Define “expansionary fiscal policy” using above Malaysia budget 2022 article. (ii) Explain…

A: The economies around the globe are involved in the use of resources which are limited in nature, in…

Q: 01. Which ff the following reasons why fine-tuning the economy is not likely to be successful, is…

A: In an economy, there are different types of economic lags that may arise when government tries to…

Q: Suppose the economy has unemployment level close to 15%. A proper fiscal policy might be which of…

A: Fiscal Policy involves use of government spending and taxation in order to influence the economy.…

Q: Answer the questions below a. Discuss why the aggregate supply (AS) curve is relatively flat within…

A: Fiscal policy involves using spending and taxes as a tool to influence the level of real GDP in the…

Q: The task I am struggling with: The accompanying diagram shows the current macroeconomic situation…

A: Meaning of Fiscal Policy: The term fiscal policy refers to the situation under which the…

Q: a fiscal contraction. Ir

A: Since you have posted a question with multiple sub-parts, we will solve first three subparts for…

Q: a) What are the three fiscal policy tools and how would each be used to counter a contractionary…

A: Fiscal policy refers to changes in government purchases and taxes, which are intended to achieve the…

Q: Counter-cyclical fiscal policy works. If consumers and businesses lose confidence because of the…

Q: Using the short-hand symbols G, Y, Md, r and I to demonstrate the effects of an expansionary fiscal…

A: The expansionary fiscal policy i.e. increase in public spending and reduction on taxes are the most…

Q: Fiscal policy involves increases or decreases in Multiple Choice O interest rates. the money supply.…

A: Fiscal policy basically refers to the use of government spending and taxation to influence the…

Q: 9. The lag associated with fiscal policy can: magnify economic fluctuations. stimulate output…

A: Fiscal Policy:- The use of spending of government and taxation policies in order to impact market…

Q: The Government and Fiscal Policy (chapter 16) Question -- When an economy is already at full…

A: Expansionary fiscal policy is government's initiative to provide increased money supply or spending…

Q: During 2008, the United States began to experience what has become known as the Financial Crisis.…

A: Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: Explain how 'crowding out' can harm productivity growth.

A: Economy is in recession and the government is considering using fiscal stimulus measures to boost…

Q: 14 MULTIPLE SELECT: If the government decides to pursue a expansionary policy, which of the…

A: An expansionary fiscal policy aims to increase the Aggregate demand by decreasing taxes and…

Question

Expansionary fiscal policy will ________GDP and ________ inflation.

a.	raise,lower
b.	lower,lower
c.	lower,raise
d.	raise,raise

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

During recessions, taxes tend to a. rise and thereby increase aggregate demand. b. fall and thereby decrease aggregate demand. c. fall and thereby increase aggregate demand. d. rise and thereby decrease aggregate demand.
When the government increases spending (expansionary fiscal policy), inflation and employment are MOST LIKELY to change in which of the following ways? Inflation Level Unemployment Decrease, Increase Decrease, Decrease Increase, Decrease O Increase, Increase
When the economy goes into a recession. real GOP---- and unemployment ___ .a. rises, risesb. rises, fallsc falls. risesd. falls, falls
Which fiscal policy is meant to decrease aggregate demand? a. Divisionary b. Built in c. Expansionary d. Contractionary
An increase in taxes would be a good policy A. when there is stagflation, as this policy would push aggregate supply to the right. B. during a recession, as this policy would stimulate aggregate demand. C. during a recession, as this policy would reduce aggregate supply. D. when there is inflation, as this policy would push aggregate demand to the left. E. when there is inflation, as this policy would push aggregate demand to the right. QUESTION 20 An increase in the price level will A. shift the aggregate demand curve to the left. B. shift the aggregate supply curve to the left. C. move the economy down along a stationary aggregate supply curve. D. shift the aggregate demand curve to the right. E. move the economy up along a stationary aggregate demand curve.
Place the fiscal policy timing lags in order from earliest to latest. Not all lags will be used. Answer bank in image Earliest lag latest lag
If the equilibrium real GDP were higher than potential GDP, then a contractionary fiscal policy would cause the inflation rate to be ________ and real GDP to be ________. a. higher; higher b. higher; lower c. lower; higher d. lower; lower
If the government increases expenditures on goods and services and increases taxation by the same amount, which of the following will occur? A. Aggregate demand will be unchanged. B. Aggregate demand will increase. C. Interest rates will decrease. D. The money supply will decrease.
If taxes are lowered, we can expect supply-side economists to support the decision to do so because a. government revenues will increase in the long run. b. government spending will decrease in the long run. c. the government will spend more in the short run. d. economic growth cannot occur without it.
Someone answer this question ASAP without explanantionA tax cut shifts aggregate demand A. by less than the tax cut. B. by the same amount as the tax cut. C. None of the options are correct. D. by more than the amount of the tax cut.
If the US government runs a budget deficit then a it is lowering the stock of public debt. b it is automatically engaging in crowding out. it is providing a net injection of spending into the rest of the economy. it is initiating a supply-side response in the d. macroeconomy.
What effect does an increase in government spending have on the aggregate demand curve in an economy? A. The aggregate demand curve shifts to the left. B. The aggregate demand curve becomes steeper. C. The aggregate demand curve shifts to the right. D. The aggregate demand curve becomes flatter.