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Discuss an expansionary fiscal policy on the keynesian cross and illustrate it.
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Answer completely and accurate answer.
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- Q) In case of DEFLATION, mention that which particular type of fiscal policy will be used and why and either each fiscal policy tool will be increased or decreased. Explanation and reasoning for each tool and its working separately is must.Price level A) A to B. B) B to C. C) C to B. D) B to A. LRAS B A) D to C B) C to B C) A to E D) B to A E SRAS AD 3 AD2 AD₁ 6) (2 pts.) Refer to the above graph. Suppose the economy is in a recession and expansionary fiscal policy is pursued. Using the basic AD-AS model in the figure above, this would be depicted as a movement from Real GDP 7. (2 pts.) Refer to the above graph. Suppose the economy is in short-run equilibrium above potential GDP and wages and prices are rising. If contractionary policy is used to move the economy back to long run equilibrium, this would be depicted as a movement from using the basic AD-AS model in the figure above.You are an economic analyst for the Parliamentary Budget Officer (PBO) and have been charged with the task of coming up with a strategy to increase investment spending in the economy. You have worked closely with Statistics Canada and are therefore aware that the identity used to calculate the country's production is GDP = C + I +G + X - IM Assuming your country does not export or import and all else is equal, you advise the PBO that: a.The budget should be in deficit, and investment by firms will then increase. b.The budget should be in deficit, and programs meant to increase private saving should be imposed. c.The budget should run a deficit, and programs meant to stimulate private spending should be imposed. d.The budget should run a surplus, and programs meant to stimulate private savings should be imposed.
- Discussion 4 Discuss the "FISCAL POLICY: A KEYNESIAN PERSPECTIVE" was John Maynard Keynes Right? (pages 289-291 Appendix), thout the cOurse in ofher words, theNo written by hand solution a) Use the AS-AD model to describe the crowding-out effect of private investment occurring when the government decides to decrease taxation (T). Your analysis should include the AS-AD, IS-LM, and the money market graph. b) Assume that the government asked you to estimate how the above reduction in taxes will affect the income/GDP in the economy. How would you answer? (Hint: Mention and discuss not only graphs, but also the formula of the multiplier, and whether the multiplier is an accurate measureQuestion 7 If the GDP is less than FEGDP there will be a Recessionary GPD gap Group of answer choices True False Flag this Question Question 8 If the goverment wants to increase the GDP it is more effective in decrease taxes than it is to increase government spending Group of answer choices True False Flag this Question Question 9 If MULG = 10 then the MPC = 0.1 Group of answer choices True False Flag this Question Question 10 If MulT = 9 then MPS = 0.1 Group of answer choices True False
- Refer to the Figure. If the economy is at point N on the curve, then a decrease in the tax rate will increase the deadweight loss of the tax and decrease tax revenue. decrease the deadweight loss of the tax and decrease tax revenue. increase the deadweight loss of the tax and increase tax revenue. decrease the deadweight loss of the tax and increase tax revenue. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.Which of the following statements about Fiscal Policy is INCORRECT?(a) In order to combat inflation, the South African Reserve Bank must apply acontractionary fiscal policy;(b) A contractionary fiscal policy can result in higher levels of unemployment; (c) Expansionary fiscal policy will increase the budget deficit; (d) The application of fiscal policy will have no effect on aggregate supply in the AD‐AS model."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.
- 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; (4) An explanation of how the implementation of this tool will work their way through the economy to achieve the desired effect; (6) The AD-AS graph showing the implications of your recommendations. (5)Economics Fiscal policymakers are faced with a $6 trillion dollar inflationary gap and are worried about inflation spiraling out of control. Furthermore, the latest estimate for the MPC is.90 in the economy. If taxes are increased by $.5 trillion dollars, then government spending needs to decrease by trillion to close the inflationary gap? (Important: Be careful how you enter your answer. If the answer is 2 trillion, just enter 2. Do not enter 2,000,000,000,000.)If the AD excess is $100 billion and the MPC is 0.5 Instructions: Enter your responses as whole numbers. (a) How much fiscal restraint is desired? $ billion (b) By how much do income taxes have to be increased to get that restraint? $ billion