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When would an increase in government purchases be an appropriate countercyclical fiscal policy?
A decrease in government spending and increase in taxes.
An example of contractionary fiscal policy would be?
A decrease in government spending and increase in taxes
When a decrease in one or more components of private spending completely offsets the increase in government spending there is?
When a decrease in one or more components of private spending completely offsets the increase in government spending, it results in a scenario known as "crowding out." In this situation, the net effect on overall demand and economic activity is neutral, as the increase in government expenditure is counterbalanced by the decline in private spending. Consequently, the intended stimulative effect of government spending may not materialize, leading to no significant change in overall economic output.
What change is definitely predicted to lower Real GDP in the short run?
A decrease in aggregate demand, an increase in the reserve requirement, an increase in the discount rate, increase in interest rates, a decrease in government spending.
What factors contribute to the decrease of both M1 and M2 money supplies?
Factors that contribute to the decrease of both M1 and M2 money supplies include a decrease in bank lending, a decrease in consumer spending, a decrease in government spending, and an increase in the demand for cash holdings.
When would an increase in government purchases be an appropriate countercyclical fiscal policy?
A decrease in government spending and increase in taxes.
An example of contractionary fiscal policy would be?
A decrease in government spending and increase in taxes
When a decrease in one or more components of private spending completely offsets the increase in government spending there is?
When a decrease in one or more components of private spending completely offsets the increase in government spending, it results in a scenario known as "crowding out." In this situation, the net effect on overall demand and economic activity is neutral, as the increase in government expenditure is counterbalanced by the decline in private spending. Consequently, the intended stimulative effect of government spending may not materialize, leading to no significant change in overall economic output.
What are the two ways the federal government could respond to an increase in the economy?
raise income taxes and decrease government spending
How is fiscal policy controlled?
Taxes, and government spending. Increasing taxes will decrease consumption and supply. Lowering taxes will increase consumption and supply. Increasing government spending will increase national consumption, and decreasing government spending will decrease national consumption. The economics AD-AS model shows a visual representation of the effects of fiscal policy on the economy if you are further interested.
What change is definitely predicted to lower Real GDP in the short run?
A decrease in aggregate demand, an increase in the reserve requirement, an increase in the discount rate, increase in interest rates, a decrease in government spending.
What factors contribute to the decrease of both M1 and M2 money supplies?
Factors that contribute to the decrease of both M1 and M2 money supplies include a decrease in bank lending, a decrease in consumer spending, a decrease in government spending, and an increase in the demand for cash holdings.
Do Keynesian economist believe that the economy is self regulating?
No, they regulate the economy by doing 2 things: 1)increasing government spending and decrease taxes to fight recession 2) decrease government spending and increase taxes to fight inflation.
In 1957 President Eisenhower's attempt to balance the budget resulted in what?
The answer to this question is one of these choices, for sure. I think that the answer is D. An Increase In Government Spending. A. A Depression B. A Recession C. A Decrease In Unemployment D. An Increase In Government Spending
A decrease in government spending will cause a?
decrease in aggregate demand
Which combination of fiscal policy actions would be most stimulative for an economy in a deep recession?
decrease taxes and increase government spending
How can the Federal government affect the fiscal policy?
Generally speaking the fiscal policies of the US Federal government are related to the monetary policies of the US Federal Reserve System. With that said, US fiscal policies of the Federal government can affect the economic situation of the US. The Federal government can do the following to influence the US economy, all of which are meant to improve the economy, however, that may not be the intended result. Here are some but not all examples of how the economy of the US can be affected by the Federal government:* Increase or decrease income taxes on personal and corporate income;* Increase or decrease gasoline taxes;* Increase or decrease tariffs;* Increase or decrease capital gains taxes ( part of income taxation );* Increase or decrease social security payments;* increase or decrease certain Medicare prices (costs )* increase or decrease Federal employment policies;* increase or decrease social spending in terms of food stamps as an example; and* Increase or maintain current levels of the national debt ceiling.
