Macroeconomics – Unit 4 Effects of Fiscal and Monetary Policy I
... i. Discretionary – a fiscal action that is initiated by an act of Congress (e.g. increase in defense spending or a cut in the income tax) (main type of fiscal action) ii. Automatic – a fiscal action that is triggered by the state of the economy (e.g. increase in unemployment causes increase in unemp ...
... i. Discretionary – a fiscal action that is initiated by an act of Congress (e.g. increase in defense spending or a cut in the income tax) (main type of fiscal action) ii. Automatic – a fiscal action that is triggered by the state of the economy (e.g. increase in unemployment causes increase in unemp ...
Notes on a Simple Keynesian Model
... If the government is to implement active fiscal policy, it must know the value of the multiplier, which depends on the MPC. For example, suppose actual output is 5000 but full-employment output is 6000. If the multiplier is 5, as was assumed above, increased government purchases of 200 would raise o ...
... If the government is to implement active fiscal policy, it must know the value of the multiplier, which depends on the MPC. For example, suppose actual output is 5000 but full-employment output is 6000. If the multiplier is 5, as was assumed above, increased government purchases of 200 would raise o ...
Bahamas_en.pdf
... increase was due to a fall in revenue, as total expenditure contracted by 0.6% to 20.8% of GDP. Current spending declined by 1.9%, as the government moved to restrict goods procurement. Capital spending expanded by 12% as the government prioritized infrastructure development to build capacity for fu ...
... increase was due to a fall in revenue, as total expenditure contracted by 0.6% to 20.8% of GDP. Current spending declined by 1.9%, as the government moved to restrict goods procurement. Capital spending expanded by 12% as the government prioritized infrastructure development to build capacity for fu ...
Fiscal Policy - Cloudfront.net
... majority of its money on? 2. From what source does the federal gov get the majority of its revenue? 3. Taxes that increase in percentage as one’s income goes up are called …. ...
... majority of its money on? 2. From what source does the federal gov get the majority of its revenue? 3. Taxes that increase in percentage as one’s income goes up are called …. ...
Income and Expenditure
... spending including investment spending lead to changes in real GDP through the actions of the multiplier. Assumption: Changes in overall spending lead to changes in aggregate output. Assumption: The interest rate is fixed. Assumption: Taxes, government transfers, and government purchases are all zer ...
... spending including investment spending lead to changes in real GDP through the actions of the multiplier. Assumption: Changes in overall spending lead to changes in aggregate output. Assumption: The interest rate is fixed. Assumption: Taxes, government transfers, and government purchases are all zer ...
Extra Practice on the M, C and I KEY
... implications does this have for the effects of expected future disposable income on consumer spending? If you expect your future disposable income to fall, you would like to save some of today’s disposable income to tide you over in the future. But you cannot do this if you cannot save. If you expec ...
... implications does this have for the effects of expected future disposable income on consumer spending? If you expect your future disposable income to fall, you would like to save some of today’s disposable income to tide you over in the future. But you cannot do this if you cannot save. If you expec ...
Effective utilization of fiscal surplus
... Are there parts of the economy that could be opened up to more competition, to reduce business costs and open up new opportunities for job creation? Could we reform our welfare system to give the unemployed more freedom of choice and control over their lives? For example, would it help if we paid th ...
... Are there parts of the economy that could be opened up to more competition, to reduce business costs and open up new opportunities for job creation? Could we reform our welfare system to give the unemployed more freedom of choice and control over their lives? For example, would it help if we paid th ...
Study Guide 14-16
... 24. Describe the belief of those that support supply-side economics. 25. List and explain the problems associated with a high national debt. 26. Describe the steps in the budget process. 27. In what order does government pay treasury bonds, treasury notes, and treasury bills? (Which will mature firs ...
... 24. Describe the belief of those that support supply-side economics. 25. List and explain the problems associated with a high national debt. 26. Describe the steps in the budget process. 27. In what order does government pay treasury bonds, treasury notes, and treasury bills? (Which will mature firs ...
The Art and Science of Economics
... From the Golden Age to Stagflation John F. Kennedy was the first president to propose a federal budget deficit to stimulate an economy by proposing a tax cut for the purpose of stimulating business investment, consumption, and employment Discretionary fiscal policy is a type of demand-management po ...
... From the Golden Age to Stagflation John F. Kennedy was the first president to propose a federal budget deficit to stimulate an economy by proposing a tax cut for the purpose of stimulating business investment, consumption, and employment Discretionary fiscal policy is a type of demand-management po ...
PRESENTATION 2 Aggregate Expenditures
... Net investment = Purchases of New Equipment + Change in Inventories Fixed Investment = Depreciation + Purchases of New ...
... Net investment = Purchases of New Equipment + Change in Inventories Fixed Investment = Depreciation + Purchases of New ...
Word Document
... o In classical theory the price level was perfectly flexible, which means AS was vertical. Keynes believed classical economics held in the long run, but not in the short run. o In orthodox Keynesianism the price level was rigid downward, which means AS was horizontal. Increases in consumption, i ...
... o In classical theory the price level was perfectly flexible, which means AS was vertical. Keynes believed classical economics held in the long run, but not in the short run. o In orthodox Keynesianism the price level was rigid downward, which means AS was horizontal. Increases in consumption, i ...
Fiscal Policy
... Changes in government purchases have a more powerful effect on the economy than equal-sized changes in taxes or transfers. ...
... Changes in government purchases have a more powerful effect on the economy than equal-sized changes in taxes or transfers. ...
Chapter 10 Presentation - Kellogg Community College
... In order to reduce or eliminate the recessionary GDP gap, aggregate demand must increase. Consumers need to increase their spending on goods and services; additional business and government spending is also desired. As aggregate demand increases, so do average prices. Rising average prices causes in ...
... In order to reduce or eliminate the recessionary GDP gap, aggregate demand must increase. Consumers need to increase their spending on goods and services; additional business and government spending is also desired. As aggregate demand increases, so do average prices. Rising average prices causes in ...
Practice Midterm 2
... 10. costs that are born even when nothing is produced (example: rent) 11. when increasing all factor of production lowers cost per unit 12. when a group of producers restricts output to raise price—acting like a monopoly. ...
... 10. costs that are born even when nothing is produced (example: rent) 11. when increasing all factor of production lowers cost per unit 12. when a group of producers restricts output to raise price—acting like a monopoly. ...
Macroeconomic Views - The Keynesian Model
... As the money supply increases, so too does the aggregate price level (ultimately leading to inflation) Prior to 1930s, this model dominated economic thought, and it guided monetary policy They left out the effect of price on aggregate output… ...
... As the money supply increases, so too does the aggregate price level (ultimately leading to inflation) Prior to 1930s, this model dominated economic thought, and it guided monetary policy They left out the effect of price on aggregate output… ...
The Tools of Fiscal Policy
... provides, from highways, to military, to education. – During a slowdown of the economy • INCREASE spending. ...
... provides, from highways, to military, to education. – During a slowdown of the economy • INCREASE spending. ...
The Tools of Fiscal Policy
... provides, from highways, to military, to education. – During a slowdown of the economy • INCREASE spending. ...
... provides, from highways, to military, to education. – During a slowdown of the economy • INCREASE spending. ...
fiscal policy
... Fiscal Cures for Recession Change the tax rates. Puts more money in the economy for Consumption and Investment. Government Spending. Unemployment benefits, money for projects like roads, building ...
... Fiscal Cures for Recession Change the tax rates. Puts more money in the economy for Consumption and Investment. Government Spending. Unemployment benefits, money for projects like roads, building ...
The Economic Stimulus Package
... Deficit-Spending Model • To encourage private expenditures, government may borrow funds from the foreign market, which increases the national deficit • Private investment is stimulated, that increases the ability of the economy to supply output in the long run • Variables for Model ...
... Deficit-Spending Model • To encourage private expenditures, government may borrow funds from the foreign market, which increases the national deficit • Private investment is stimulated, that increases the ability of the economy to supply output in the long run • Variables for Model ...