Imagine Sri Lanka is trying to reduce inflation using a contractionary fiscal policy. Discuss the impact of a contractionary fiscal policy using suitable diagrams ...
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Imagine Sri Lanka is trying to reduce inflation using a contractionary fiscal policy. Discuss the impact of a contractionary fiscal policy using suitable diagrams ...
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- Asap Suppose that Shen, an economist from a research facility in Washington, and Valerie, another economist from an investigative reporting group, are both guests on a popular science podcast. The host of the podcast is facilitating their, debate over budget deficits. The following dialogue represents a portion of the transcript of their discussion: Valerie: Most people recognize that the budget deficit has been rising considerably over the last century. We need to find the best course. of action to remedy this situation. Shen: I believe that a cut in income tax rates would boost economic growth and raise tax revenue enough to reduce budget deficits Valerie: I actually feel that raising the top income tax rate would reduce the budget deficit more effectively. The disagreement between these economists is most likely due to Despite their differences, with which proposition are two economists chosen at random most likely to agree? Business managers can raise profit more easily by…Consider the economy of Canada. Its households spend 55% of increases in their income and saves 45 %. There are no taxes and no foreign trade. Currently, Canada has a recessionary gap, the governments aim is to get actual output to increase by 220 billion dollars. How much of a tax cut do they need to have to achieve the overall increase in output of 220 billion dollars?Which do you believe is the better macroeconomic policy to use for stabilizing (achieving potential GDP and controlling inflation) the economy - Monetary or Fiscal? SUPPORT your stance (for example, if you believe fiscal policy is better than monetary policy, explain how fiscal policy (pros) achieves these objectives better than monetary policy (cons)).
- The graph below depicts an economy where an increase in aggregate demand has caused inflation. Assume the government decides to conduct fiscal policy by changing taxes to bring inflation under control. Fiscal Policy 180 LRAS AS 160 140 120 100 AD, 80 60 AD 40 100 200 300 400 500 600 700 800 Real GDP (billions of dollars) istructions: Enter your answer as a whole number. If you are entering a negative number include a minus sign. Price LevelGovernments may achieve certain economic goals; say controlling inflation or boostingeconomic growth, by implementing fiscal and/or monetary policies. Briefly explain thedifference between fiscal and monetary policiesAssume the Philippines government adopted fiscal policy measures to reduce the severety of typhoon Haiyan on the economy. Answer the questions below. Did typhoon Haiyan cause economic expansion or a recession? Explain your answer using at least two economic effects on the Philippines economy. Examine the effects of government expenditure as a fiscal policy measure on the Philippines economy.
- How would a Keynesian Economist use Fiscal Policy to fight a Recession? Please do not write about Monetary Policy here, only Fiscal Policy.Q.3.2 Explain, using the AD-AS model, how the South African Government can use fiscal policy as a tool to recover from the negative effects of this COVID-19 pandemic. Your answer must include the following: The description of the type of fiscal policy required; An explanation of how the implementation of this tool will work their way through the economy to achieve the desired effect; The AD-AS graph showing the implications of your recommendations.Inflation rates in the US have recently been at their highest level in decades. Imagine your local Congressman came to you for advice. If lower inflation is her only goal, what is a specific Fiscal Policy that you would recommend? Note: you must be specific - name the fiscal policy tool that you would use and how you would change it (increase or decrease or raise or lower or buy or sell - whatever is relevant to the tool you're talking about). It's not enough to say "expansionary fiscal policy" or "contractionary fiscal policy." Feel free to review the sections of the text on expansionary and contractionary.fiscal policy to review the specific types of policies that fiscal policy includes.
- DEFINE FISCAL POLICY. WOULD THE INCREASE OF $100 IN GOVERNMENT SPENDING HAVE THE SAME EFFECT ON GDP AS OF DECREASE IN TAXES OF $100? WHY OR WHY NOT?Explain the difference between fiscal policy and monetary policy. What are some of the reasons these macroeconomic policies are used? Elaborate on reasons these policies are used.The Government of Bangladesh opted for expansionary fiscal policy to fight economic depression. Identify the type of inflation it is expected to create and its impact on the wages. Illustrate the process on the graph. Assume the Pakistan’s economy is in recession: Pakistan implements a combination of expansionary fiscal and monetary policy. In the absence of complete crowding out what will be the effect of these policies on each of the following:(i) Aggregate demand in Pakistan(ii) The price level in Pakistan(iii) Interest rates in Pakistan