Fed economists say the plan would go into effect during a time when the economy was already performing well, and would, therefore, not have the impact advertised by the administration. D tax cuts during recession and reductions in government spending during inflation. It gives consumers less purchasing power. When the economy is in facing recessionary pressures, the government provides stimulus to the economy by either decreasing taxes or increasing its expenditures or taking both the steps simultaneously. Refer to the above diagram, in which Qf is the full-employment output. The cards are meant to be seen as a digital flashcard as they appear double sided, or rather hide the answer giving you the opportunity to think about the question at hand and answer it in your head or on a sheet before revealing the correct answer to yourself or studying partner.
This flashcard is meant to be used for studying, quizzing and learning new information. However, Keynes' ideas became a central part of economic theory following one of the largest catastrophes in the American economy - the Great Depression. Undertake the investment because the expected rate of return of 9 percent is greater than the real rate of interest D. . If you are estimating your total expenses for school next semester, you are using money primarily as: a medium of exchange. C tax cuts during recession and reductions in government spending during inflation. C tax cuts during recession and reductions in government spending during inflation.
Wheat would function as money so long as people accept it in exchange for goods and services. D necessarily reduces the size of government. However, if the government doesn't have enough cash to fund its own spending, it will often borrow money in the form of issuing government bonds or treasury bonds - debt securities - and, thus, spends the funds under this debt. From the above it can be seen why the commercial banking system can safely lend a multiple of its excess reserves. After its passage, the markets rose, with the Dow Jones Industrial Average rising 0. Fiscal policy grew out of the ideas of John Maynard Keynes - a British economist in the late 1800s to 1900s - who asserted that the government should be able to use its influence on the economy to balance out the expansion and contraction phases of the business cycle.
In a private closed economy, the two components of aggregate expenditures are: A. D reduce unemployment compensation benefits. All output produced and accumulated over the years 47. All of these are possible outcomes. When a bank grants a loan- it can expect that the borrower will not leave the proceeds of the loan sitting idle in his or her account. Lower sales due to lower consumption means businesses will not be interested in making any new investments.
And while the economy recovered a bit, it soon required contractionary fiscal policy to right it again. If you write a check on a bank to purchase a used Honda Civic, you are using money primarily as: a medium of exchange. An increase in government expenditures will have a multiplier effect on the economy. An economist who favors smaller government would recommend: A increases in government spending during recession and tax increases during inflation. Cyclical unemployment is at a minimum point B. D increases in government spending during recession and tax increases during inflation.
When economists say that money serves as a store of value, they mean that it is: a way to keep wealth in a readily spendable form for future use. A additional taxes on personal incomes C borrowing from the public B creating new money D additional taxes on corporate profits 17. Assume that aggregate demand in the economy is excessive, causing demand-pull inflation. Undertake the investment because the expected rate of return of 12 percent is greater than the real rate of interest B. All final goods and services produced in an economy in a given year C.
Consumption and government spending B. All figures are in billions. B tax cuts during recession and tax increases during inflation. C government should undertake neither an expansionary nor a contractionary fiscal policy. For this reason, expansionary is sometimes detrimental to the economy.
Greater than planned investment B. The central idea behind fiscal policy is that, by manipulating spending and taxation, the government can either stimulate consumption and investment or slow it down depending on the market signals. Fiscal policy is carried out primarily by: A the Federal government. Marginal propensity to consume D. Greater than planned aggregate expenditures C. While fiscal policy deals mostly with government legislation regarding taxes and spending, attempts to control economic growth whether to stimulate or slow down by managing interest rates and the supply of money in the economy. An economist who favored expanded government would recommend: A increases in government spending during recession and tax increases during inflation.