The demand for the dollar will increase in other countries and the dollar will appreciate. Which of the following is true in the short run when comparing an increase in government spending to an increase in private investment spending? Government spending must equal taxes; private investment spending must equal saving .
Which of the following best explains why a tax cut can lead to an increase in consumer spending in the short run?
Which of the following best explains why a $7 billion tax cut can lead to a $9 billion increase in consumer spending in the short run? ... Tax cuts increase disposable income , which leads to higher national income and additional consumer spending.
Which of the following factors is projected to be the dominant source of economic growth in the US from now until 2026?
Which of the following factors is projected to be the dominant source of economic growth in the U.S. from now until 2026? technological advances account for about 40 percent of U.S. productivity growth.
Which of the following actions by a nations central bank would be most effective in reducing inflation?
Which of the following actions by a nation's central bank would be most effective in reducing inflation? Selling government securities to the open market . LOWER U.S. interest rates cause the value of the dollar to: Fall, making U.S. goods relatively cheaper on world markets.
What does discretionary fiscal policy refer to?
Discretionary fiscal policy means the government make changes to tax rates and or levels of government spending . For example, cutting VAT in 2009 to provide boost to spending. Expansionary fiscal policy is cutting taxes and/or increasing government spending.
What are the positive and negative effects of taxation?
Taxation has both favourable and unfavourable effects on the distribution of income and wealth . Whether taxes reduce or increase income inequality depends on the nature of taxes. A steeply progressive taxation system tends to reduce income inequality since the burden of such taxes falls heavily on the richer persons.
Which of the following is true in the short run when comparing an increase in government spending?
Which of the following is true in the short run when comparing an increase in government spending to an increase in private investment spending? Government spending must equal taxes ; private investment spending must equal saving.
What will the economy look like in 2050?
The global economic balance is expected to change significantly between now and 2050. ... By 2050, Asia's share of the global market share of GDP will grow to over 50% (driven largely by China and India). North American and Europe will account for about 20% each, while the rest of the world will account for less than 10%.
Who will rule the world in 2050?
China, India, and the United States will emerge as the world's three largest economies in 2050, with a total real U.S. dollar GDP of 70 percent more than the GDP of all the other G20 countries combined. In China and India alone, GDP is predicted to increase by nearly $60 trillion, the current size of the world economy.
Is the general rise in prices throughout an economy?
What is inflation ? Inflation is defined as a rise in the general price level. In other words, prices of many goods and services such as housing, apparel, food, transportation, and fuel must be increasing in order for inflation to occur in the overall economy.
What steps government can take to contain the rise of inflation?
In fiscal policy, the government controls inflation either by reducing private spending or by decreasing government expenditure , or by using both. It reduces private spending by increasing taxes on private businesses. When private spending is more, the government reduces its expenditure to control inflation.
What is a decrease in inflation?
Disinflation is a decrease in the rate of inflation – a slowdown in the rate of increase of the general price level of goods and services in a nation's gross domestic product over time. ... Disinflation occurs when the increase in the “consumer price level” slows down from the previous period when the prices were rising.
How does Fed fight inflation?
One popular method of controlling inflation is through a contractionary monetary policy . The goal of a contractionary policy is to reduce the money supply within an economy by decreasing bond prices and increasing interest rates. ... So spending drops, prices drop and inflation slows.
What are the two types of discretionary fiscal policy?
The government has two types of discretionary fiscal policy options— expansionary and contractionary . Each type of fiscal policy is used during different phases of the economic cycle to stop or slow recessions and booms.
What is a problem associated with discretionary fiscal policy?
Given the uncertainties over interest rate effects, time lags (implementation lag, legislative lag, and recognition lag), temporary and permanent policies , and unpredictable political behavior, many economists and knowledgeable policymakers have concluded that discretionary fiscal policy is a blunt instrument and ...
Are stimulus checks discretionary fiscal policy?
Stimulus Check Explained
People with unpaid taxes will usually see the checks automatically applied to their outstanding amount owed. Stimulus checks are a form of fiscal policy , which means it is a policy used by the government to try and influence the economic conditions of a country.
