Discretionary fiscal policy includesMultiple Choiceautomatic stabetzerstax decisions from previous yearsnew tex and spending decisionsspending decisions from previous years

Governments can react more aggressively to changing economic conditions when they can implement…

Answered: Discretionary fiscal policy includes…

Discretionary fiscal policy includes Mumple Choice automatic stabzers ta decisions from previous years new tex and spending decisions spending decisions from previous years

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: FRED-Real gross domestic product per capita Chained 2017 Dollars 70,000 60,000 50,000 40,000 30,000…

A: The GDP indicates the overall domestic production that an economy produces. It is essential to…

Q: n a country, the marginal propensity to consume is 0.4. Investment demand is represented by I(r ) =…

A: In this step, we use the IS (Investment-Savings) equation to find the change in aggregate demand…

Q: "Screening" is the process by which O a. firms calculate the point of MRP = MFC. O b. wages tend to…

A: In the realm of labor economics and human resource management, various strategies and processes are…

Q: 3. Changes in the money supply The following graph represents the money market for some hypothetical…

A: Money supply refers to the total amount of money in circulation in an economy. The money supply is…

Q: The reservation prices, in dollars, for three classes of demanders (A, B, and C) for three…

A: Bundle pricing is a pricing strategy that involves offering two or more related products or services…

Q: 1. Write a short case that must cover 3 different risk types and 3 different loss types.

A: Note: As per the guidelines in case of multiple types of questions, only do the first one. If you…

Q: 3. You and a fellow student are working on a joint project in a course. You each know that your…

A: The Cournot model is an economic theory for analyzing how firms in an oligopoly (a market with a few…

Q: If a consumer's Engle curve for a certain product is downward sloping then (a) the product must be a…

A: Engle curves are graphical representations that show the relationship between a consumer's income…

Q: Unit of Labor 1 2 3 4 4 5 6 3 Refer to the table, which gives data for a firm that is hiring labor…

A: The data for hiring labour in a purely competitive market is given as Wage rate in the prevailing…

Q: Suppose that single-price, single-product and single-plant monopolist faces the following demand…

A: Monopoly refers to a market where only one firm exists in the market. The monopoly firm is price…

Q: d) Another classmate cares more about good grades: She gets 50 units of happiness for a B and 80…

A: When both works hard then both get A and when one of them works hard then both get B. When neither…

Q: The interest rate in the US is 4%, the rate in Brazil is 5%, and the expected rate of depreciation…

A: The incompatible trinity, also known as the trilemma, states that it is impossible to have all three…

Q: 25 20 15 10 5 O P 3 CO S 9 12 15 18 21 24 IP D 25. If the free trade price is IP and this country…

A: An import quota is a trade restriction that sets a limit on the quantity of goods that can be…

Q: Suppose there are 100 farms in this industry with identical cost curves, as shown in the table.…

A: Industry supply refers to the aggregate supply of all the individual producers in the market willing…

Q: In the above figures, supposed that there is no import or proportional tax. To pull the economy back…

A: Marginal propensity to consume (MPC) measures the change in consumption expenditure due to a change…

Q: Which of the following would initiate a negative AD shock? taxes decrease monetary policy lowers the…

A: A negative AD (Aggregate Demand) shock refers to a sudden event that decreases the total demand for…

Q: Austin is a dot-com entrepreneur who has established a Web site at which people can design and buy…

A: Economic profit can be understood as the difference between the total revenue and the sum of…

Q: Ski Boards, Inc., wants to enter the market quickly with a new finish on its ski boards. It has…

A: A total cost curve is a graph that represents the total cost of production as a function of the…

Q: 19) The diagram below shows supply and demand before (S and D) and after (ST) the government imposes…

A: The price at which the needs of producers (suppliers) and consumers (demanders) align is known as…

Q: The sum of all past federal deficits minus any surpluses is called the A) transfer balance.…

A: A recession is characterised by a sharp slowdown or collapse in economic activity. A recession is…

Q: A bookstore owner can sell 26 magazines at a price of $1.38 per magazine. If the price is $1.10, he…

A: The total number of magazines sold at a price of $1.38 per magazine is 26. At $1.10, the total…

Q: Jay's Bernoulli utility function is u(x) = ln (x + 1), where x denotes wealth. Suppose Jay's wealth…

A: Lotteries and unexpected gains are pivotal in economics, shaping consumer actions, wealth…

Q: Which of the following would shift a market labor supply curve to the left? Group of answer choices…

A: Supply curve is the graphical representation of producers' production actually supplied to the…

Q: You deposit a sum d in a bank account in year zero. The rate of interest on deposits is r, and…

A: The objective of the question is to find the formula for the amount of money in a bank account after…

Q: Intended Spending (billions) $2,300 $2,100 $1,900 $1,700 $1,500 The marginal propensity to consume…

A: The marginal propensity to consume will be defined as change in consumption spending with respect to…

Q: Refer to Figure 15-5. What is a profit-maximizing monopoly's total cost? a. POX Q2 b. POX QO OC. POx…

A: The monopoly refers to a market where only one firm exists. The single firm is a price maker in the…

Q: b A -10, 30 B 6,-1 0,0 C -1,20 -20, 100 What is the Nash Equilibrium of this game? a 500,0 O a. (C,…

A: In game theory, a Nash Equilibrium is a fundamental concept representing a stable state in a…

Q: Of the four choices below, which causes a shift in the Supply of dollars to the right? A. An…

A: The objective of the question is to identify which of the given scenarios would cause a shift in the…

Q: Assume that John has the same political affiliation as the President of his country. For his…

A: Behavioral economics examines the impact of psychological and social elements on economic…

Q: In the Long Run Monopoly profits O Are likely to be Positive, which is not possible in Perfect…

A: A monopolist refers to a sole producer of a good with no close substitutes and barriers to entry and…

Q: Refer to the table. The value of gross domestic product in billions of dollars is Durable goods…

A: Gross Domestic Product:Gross Domestic Product is associated with the monetary value that is related…

Q: Suppose that inflation is 2 percent, the Federal funds rate is 4 percent, and real GDP falls 2…

A: According to Taylor rule Federal Reserve should increase rates when inflation is above target and…

Q: PA P3 $ P₂ P₁ 0 A Di OE E: 93 B 92 Quantity 91 Demand Suppose that supply is perfectly elastic and…

A: This problem focuses on calculating the excess burden of an excise tax that raises the price from P1…

Q: Steel (millions of tons) 20 10 0 Country A Production possibilition curve 10 20 30 40 Chemicale…

A: This question focuses on to interpret the information displayed in the diagrams.The diagrams…

Q: The next two questions refer to the following table showing a monopolist's demand schedule: Price…

A: The study of how firms make decisions and allocate resources in the face of many barriers is known…

Q: Suppose a bank gets $500 million dollars in deposits. The bank can only make loans and keep…

A: Bank reserves are the funds that financial organizations are required to hold in cash or on deposit…

Q: Why is mobile marketing different from desktop marketing?

A: The provided question's answer includes the standpoint of economic theories and thus, it is answered…

Q: Rate of Interest 4 0 Smi Sm2 Sm3 D₁ 125 175 250 325 Quantity of Money Dm Refer to the above graph,…

A: Demand for money is the sum of transaction demand for money, asset demand for money, and speculative…

Q: The government raises revenue through taxation to pay for the services it provides. a. True b. False

A: Governments are institutions or entities that hold authority over a defined geographical area or a…

Q: Give one example each of Perfect Competition and Monopolistic Competition. Give two similarities and…

A: The problem is to compare and contrast perfect competition and monopolistic competition by…

Q: 3. Consider the supply and demand graph below to answer three questions: (a) Use a letter to…

A: Demand:Demand is the desire of an individual ability and willingness to pay for a product. The…

Q: Primary data is any information that is readily available and useful for any project or purpose.…

A: The data is amount of information collected systematically with the purpose of analysis, processing,…

Q: Which of the following is a basic measure of macroeconomic performance? O Output growth. O…

A: Macroeconomic performance is assessed using various indicators that reflect the health and stability…

Q: Those who classify themselves as underemployed are included in the unemployment rate. Select the…

A: A subfield of economics known as labour economics studies how labour markets operate and how…

Q: Given your understanding of the various market structures, use the information contained in the…

A: Monopolistic competition is a form of imperfect competition. There are many firms. There is free…

Q: wine SERERASAD 90 80 70 60. 50. 40 - 30. → 20 PPF Portugal - CPF 10 0 0 10 20 30 40 50 60 cloth wine…

A: PPF refers to the curve on a graph that shows the possible units that can be produced of 2 goods if…

Q: Polly's Purses operates with a Cost function C (x) = 1300 + 150x, and Revenue function R(x) = 285x.…

A: Profit is the financial gain or benefit obtained by an individual, business, or organization when…

Q: PRICE LEVEL P₂ P₁ 4 B Y, Y₂ QUANTITY OF OUTPUT SRAS AD The shift of the short-run aggregate-supply…

A: In macroeconomics, the AS curve is a key idea. An essential instrument for analyzing an economy's…

Q: The figure below shows the hypothetical domestic supply and demand for baseball caps in the country…

A: The demand curve is the graphical representation of different quantities of commodities that the…

Q: In a PPC graph, if free trade makes the budget line become flatter and the comparative advantage…

A: This problem focuses on understanding the impact of free trade on a country's terms of trade, it's…

Concept explainers

Fiscal Policy and Money Market

Fiscal policy is one of the important tools that is used by the government to control inflation or aggregate demand in the economy. Under this policy, there are two rules which are used by the government, one is the expenditure of the government and the other is the taxation or income of the government which it collects from the public.

Question

Discretionary fiscal policy includes
Multiple Choice
automatic stabetzers
tax decisions from previous years
new tex and spending decisions
spending decisions from previous years

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: Write an introduction on discretionary fiscal policy

VIEW

Step 2: Explain the correct option

VIEW

Step 3: Explain the incorrect options

VIEW

Solution

VIEW

Step by step

Solved in 4 steps

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

Exercise D24 Compare two policies: a tax cut on income or an increase in government spending on roads and bridges. What are both the short-term and longâ€”term impacts of such policies on the economy?
Why is spending by the U.S. government on scientific research at NASA fiscal policy while spending by the University of Illinois is not fiscal policy? Why is a cut in the payroll tax fiscal policy whereas a cut in a state income tax is not fiscal policy?
During the Great Recession of 20082009, what actions would have been required of Congress and the President had a balanced budget amendment to the Constitution been ratified? What impact would that have had on the unemployment rate?
EXPANSIONARY FISCAL POLICY 20% GOVERNMENT SPENDING 80% TAKATION Gvemme Spnding Taationmater than pter than tation apud How will Expansionary Fiscal Policy affect the Federal Budget? A budget surplus will decrease the national debt Deficit spending will decrease the national debt Deficit spending will increase the national debt A budget surplus will increase the national debt
When Amy's income increased her average tax rate decreased trom 20 peroent to 15 percent. When Alice's income increased. her average tax tate increased hom 20 percent to 2 percent When Juke's income incremed, his average tax rate didn't change Ives in an economy witha pgressive ta ystem pays a proportional te and lives in an economy with a regressive ta ystemm OA. Ale Ay Jake 0B Amy Alice Jake OC. Alce, Jake, Amy O D. Jake, Amy Alice
spending 51. Discretionary Fiscal Policy differs from Nondiscretionary Fiscal Policy in tha a. The former deals with interest rates and the latter deals with tax policy b. The former is built into the system whereas the latter requires timely decisions C. The former requires timely decisions whereas the latter is built into the system d. The former deals with tax policy and the latter deals with interest rates 52. An eyamnlo of nondigounti figool noliey would be
Which of the following statementsabout how fiscal policy should mostappropriately be used in a crisis iscorrect? a. If fiscal policy is usedappropriately, a fiscal deficitshould appear duringrecessionary gaps and asurplus during inflationary gaps b. Fiscalpolicy should be used at anyand all points of the cycle toaccelerate growth c. None of these statements iscorrect d. If fiscal policy is usedappropriately, a fiscal surplusshould appear duringrecessionary gaps and a fiscaldeficit during inflationarygaps
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
learn-us-east-1-prod-fleet01-xythos.content.blackboardcdn.com Bb https://.. a SD Bb Bb Bb 1. From the time of George Washington's presidency to the present, the percentage of the average American's income that goes to pay taxes A. has decreased from about 20 percent to about 10 percent. has decreased from about 50 percent to about 25 percent. C. has remained constant at about 10 percent. D. has risen from less than 2 percent to above 45 percent. Е. В. has risen from less than 5 percent to above 25 percent. 2. According to the textbook, which of the following statements is (are) correct for the United States? (x) The individual income tax and the payroll tax are the two largest sources of revenue for the U.S. federal government. (y) Corporate income taxes and excise taxes make up more than 30 percent of the tax revenue for the U.S. federal government. (z) In general, the two most important taxes for state and local governments in the U.S are sales taxes and property taxes. А. (x), (y)…
"The United States has the world'slargest fiscal deficit in total USdollars." Could anything be changedin this statement to correctly evaluatewhether the United States has a fiscaldeficit problem? a. We need to know how large theUS debt is already. b. Deficits should be expressed asa per cent of GDP to correctlyevaluate them. c. All of the information givenhere is necessary to correctlyevaluate whether the UnitedStates has a fiscal deficitproblem. d. We need to know whether thedeficit has occurred during aninflationary gap or arecessionary gap.
"Willam H. Branson" of "Macroeconomic Theory and policy" states that the "Fiscalist Model is an improbable, extreme case of the general model and not a stance to be taken seriously". However, the economic scenario during COVID 19 might indicate otherwise. Write an essay in about 500-600 words expressing your thoughts on this matter. Instructions: Please provide relevant statistics/data in order to substantiate your opinions.
What is fiscal imbalance? Fiscal imbalance is the _______ value of the government's commitments to pay benefits minus the _______ value of its tax revenues. A. future; future B. future; present C. present; future D. present; present