Which of the following policies will shift the IS curve to the right a) An increase in the equilibrium level of income y* b) the central bank buys public debt c) an increase in government spending d) All of the choice are correct
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Which of the following policies will shift the IS curve to the right
a) An increase in the equilibrium level of income y*
b) the central bank buys public debt
c) an increase in government spending
d) All of the choice are correct
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Solved in 2 steps
- Only typed answer An economy is described by the following equations: C = 60 + 0.75 (Y – T) I p = 100 G = 150 NX = 30 T = 180 Y* = 760 By how much would government purchases have to change in order to eliminate any output gap?Which of the following would not be classified as Expenditure Reducing Policies? Select one: a. None of the answers is correct b. All the answers are correct c. Using Fiscal and monetary policies d. Policies to improve competitiveness e. Devaluing the exchange rateAssume that the economy is now governed by a government and begins trading with other economies. The economy is described by the following set of equations. ?=1000+0.5⋅?d ID = 600 G=700 T=400 EX=0.1⋅Y IM=100+0.1⋅Y YD = Y - T Calculate the equilibrium level of output Y* a) 2857 b) 4000 c) 6274 d) 4400 Whats the government expenditure multiplier? Whats the tax multiplier? Whats the ba;anced budget multiplier?
- Automatic stabilizers: A) counteract both recessions and expansions through changes in spending without government action. B) are government programs to employ workers during recessions. C) create government budget surpluses during economic recessions. D) are designed to reduce the price level directly.What effect an increase of government spending will have on the output equilibrium in the goods market? Explain using autonomous spending. please explainSuppose that the macroeconomic equilibrium is determined in the closed economy (AE = C+I +G). Show and explain the effects of an increase in the marginal tax rate (t) on macroeconomic equilibrium.
- How can a reduction in Corporation Tax lead to supply side improvements in an economy?An economy is described by the following equations: C = 500 + 0.85(Y – T), Cis consumption, Y is income and T is taxation M=0.05(1-t)Y imports IP = 1500, planned investment G = 400, government spending T = tY, t = 0.2 is the marginal tax rate X = 1200, X is exports I. The equilibrium level of output for the above economy is 22500 Do NOT include any letters, spaces or symbols (e.g. "$" or ",") in your answer. II. The multiplier for this economy is equal to 6.67 (Round to 2 decimal places) III. Suppose that, in this economy, there is an exogenous decrease in spending of 180. This economy will now be experiencing expansionary gap. Possible answers (write ONE of the following only): "a contractionary" OR "an expansionary". IV. If the potential output of the economy is 10,000, the size of the output gap arising from part III will be Do NOT include any letters, spaces or symbols (e.g. "$" or ",") in your answer. V. If the Okun's Law beta parameter is 2, the cyclical unemployment rate…Discuss the three main supply-side policies that the government can use to reduceunemployment?
- Ruritania's economy is depicted below, with the long run aggregate supply curve (LRAS), three short run aggregate supply curves (AS1, AS2, and AS3) and three aggregate demand curves (AD1, AD2, and AD3). Right now, Ruritania is at point A, with real GDP of 7 trillion krone and a price level of 100. Answer the questions based on the information in the graph. A shift to which curve would result in a short run equilibrium of 5 trillion krone and a lower price level? AS1 AD1 AS3 AD3 Price level 200 180 160 140 120 100 80 60 40 20 0 1 2 3 LRAS 5 6 7 A AS3 AS2 AD2 AS1 AD3 AD1 8 9 10 11 12 13 14 Real GDP (trillion krone)Which of the following is an example of an expenditure-increasing policy? a. a decrease in import quotas b. an increase in the money supply c. an increase in import tariffs d. higher income taxesIf the government were to implement one of the policies selected above, which curve will shift? Group of answer choices (A) the AD curve (B) the LRAS curve (C) the SRAS curve