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What is a fiscal policy tool used to stimulate the economy Reducing inefficient employment of resources Lower interest rates Increased imports Increased government purchases?
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∙ 12y ago
increased government purchases.
Wiki User
∙ 12y ago
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In keynesian cross assume that the consumption function is given by C 200 0.75Y-T planned investment is 100 government purchases and taxes are both 100 if the government purchase increased 125?
This isn't a question
What is the connection between an increase in government purchases and the trade deficit?
This is a question of the crowding effect of government spending. When the government increases purchases, it will increase the GDP by a multiplier effect, i.e., the change in GDP is the change in G times 1/(1-MPC). In an IS-LM model, the increased GDP will raise the interest rate and discourage the private investment. Such a "crowding out" effect will reduce the GDP increase. On the other hand, the increased interest rate will raise the international demand for domestic currency and, in turn, increase the exchange rate. A higher exchange rate makes the domestic products more expensive and foreign goods cheaper. Therefore, the export will be lowered while the import will be increased. As a result, the trade deficit will be enlarged.
When would an increase in government purchases be an appropriate countercyclical fiscal policy?
A decrease in government spending and increase in taxes.
What are the four major uses of total output?
consumption, investment, government purchases, and net exports
Government purchases in national income accounts would include expenditures for payments of?
Social securiy
In keynesian cross assume that the consumption function is given by C 200 0.75Y-T planned investment is 100 government purchases and taxes are both 100 if the government purchase increased 125?
This isn't a question
What is the effect of taxes on your income and purchases?
Income reduced & Purchase value Increased.
Are purchases account is increased by a credit and decreased by a debit?
Purchases account is personal account in nature so debit means increase and credit means decrease.
Since most purchases are under the micro purchase threshold the Government will normally pay state and local taxes on purchases made with the Government Purchase Card.?
False
Since most purchases are under the micro purchase threshold the Government will normally pay state and local taxes on purchases made with the Government Purchase Card?
False
What percentage of GDP is accounted for by total government purchases?
Today, total goverment purchases represent about 18% of GDP.
If the FOMC purchases government securities credit is stimulated?
Yes
What is the connection between an increase in government purchases and the trade deficit?
This is a question of the crowding effect of government spending. When the government increases purchases, it will increase the GDP by a multiplier effect, i.e., the change in GDP is the change in G times 1/(1-MPC). In an IS-LM model, the increased GDP will raise the interest rate and discourage the private investment. Such a "crowding out" effect will reduce the GDP increase. On the other hand, the increased interest rate will raise the international demand for domestic currency and, in turn, increase the exchange rate. A higher exchange rate makes the domestic products more expensive and foreign goods cheaper. Therefore, the export will be lowered while the import will be increased. As a result, the trade deficit will be enlarged.
What does invest mean in government?
Invest, in government, means to use the taxes paid by its citizens. These can be in forms of purchases of equipment for government use, or government securities.
When would an increase in government purchases be an appropriate countercyclical fiscal policy?
A decrease in government spending and increase in taxes.
What incentives are there for a person who is thinking of applying for the CIBC Aerogold Visa?
The CIBC Aerogold visa has incentives for customers such as Aerogold miles on purchases and balance transfers and increased Aerogold miles for purchases of food and gas.
If the fomc purchases government securities credit is stimulated . true or false?
True
