The short-run effect on equilibrium GDP of an equal change in government expenditure and net taxes is a definition of:Group of answer choicesbalanced growththe balanced budget multiplierbalanced savingsbalanced GDPthe balanced budget

Fiscal policy is NOT often used as a stabilisation tool. However, it does have important roles in the economy. Three of these roles are:  managing full employmen, price stability and exchange rates.   managing collection of taxes, public health and antiterrorism policy   managing government monetary policy, inflation and interest rates   managing income distribution, demographic change, and public debt   managing public assets, defence projects, and public safety Review Week 5 lecture on fiscal policy.  Question 21 / 1 ptsThe short-run effect on equilibrium GDP of an equal change in government expenditure and net taxes is a definition of:  balanced GDP   balanced savings   the balanced budget   the balanced budget multiplier   balanced growth This concept is useful when G and T change by an equal amount. Question 31 / 1 ptsGovernment budget deficits tend to  increase when there is an expansionary output gap.  remain in balance irrespective of business cycles  increase in recessions  None of the others is correct.  decrease in recessionsReview fiscal policy and measuring budget deficits in Lecture 5. Question 41 / 1 ptsIf the marginal propensity to consume equals 0.75, then a $100 increase in after-tax disposable income leads to a _____ increase in consumption.  $0.25   $25   $100   $75   $0.75 Review the Keynesian consumption function in Lecture 4. Question 51 / 1 ptsIn the basic Keynesian model, all statements below except for one are true. Which is the incorrect statement?   Planned net exports always equal actual net exports.   Planned government spending always equals actual government spending.   Planned consumption always equals actual consumption.   Planned aggregate expenditure is always equal to output in equilibrium.   Planned investment always equals actual investment. Review the Keynesian model in Lecture 4. Question 61 / 1 ptsWhich of the following acts as an automatic stabiliser?  None of the other answer options is correct.   Unemployment benefit payments to the unemployed   Interest rate changes   Increases in government spending on infrastructure   Reductions in nominal wages as the inflation rates rise Review the fiscal policy for stabilisation in Lecture 5. Question 71 / 1 ptsIf we assume that the planned aggregate expenditure is given by the equation PAE = 960 + 0.8Y so that exogenous expenditure equalled 960, with the multiplier of 5, the 10-unit drop in exogenous expenditure would result in a _____________ in short-run equilibrium output.  None of the answers is correct   50-unit decline   40-unit decline   950-unit decline   4-unit decline Review the multiplier effect in the Keynesian model in Lecture 4. Question 81 / 1 ptsSustained government deficits can be harmful because they reduce national ____, which in turn reduce _____ in new capital goods, an important source of long-run ________:  output gap; disposable income; exports   savings; investments; economic growth   inflation; poverty gap; output shortage   equality gap, employment; welfare   none of the others Think about the relation between government deficits and the economy. Question 91 / 1 ptsA$100 million increase in government purchases will have a bigger impact on equilibrium output  The smaller are the marginal tax rate and marginal propensity to import and the larger is the marginal propensity to consume.   The smaller are the marginal tax rate and marginal propensity to consume and the larger is the marginal propensity to import.   The larger are the marginal tax rate and marginal propensity to import and the smaller is the marginal propensity to consume.   The smaller are the marginal tax rate and marginal propensity to import and the smaller is the marginal propensity to consume.   The larger are the marginal tax rate and marginal propensity to import and the larger is the marginal propensity to consume. Review the four-sector economy multiplier. Question 101 / 1 ptsIf planned aggregate expenditure (PAE) in an economy equals 2000 + 0.8Y and potential output (Y*) equals 9000, then this economy has:  no induced expenditure.   No output gap.   an expansionary gap.   a recessionary gap.   no autonomous expenditure.

Suppose that the federal budget is balanced when GDP is at potential GDP. If equilibrium GDP falls below potential, please explain how and why government transfer payments would change; how and why tax receipts would change; how and why the budget would change.

3. If the short-run macroeconomic equilibrium occurs with real GDP less than Y*, the economy isA) at its full-employment level of output.B) experiencing a recessionary gap.C) experiencing an inationary gap.D) threatened with an acceleration of ination.E) operating at full [email protected]

If the GDP is at its potential level, then what is the long-run effect of an increase in government purchases (G)? Reduction of consumption, net exports and investment through the wealth, interest rate and international trade effects. Reduction of only investment through the interest rate effect. Reduction of only consumption and investment through the wealth and interest rate effects. Reduction of only net exports through the international trade effect. Reduction of only consumption through the wealth and interest rate effects.

Assume that planned aggregate expenditure is given by the equation: PAE = 150 + 0.5Y. What is the effect of a 5 unit increase in government expenditure on short-run equilibrium output?Group of answer choicesOutput increases by 10 unitsOutput increases by 5 unitsOutput increases by 0.5 unitsNo change in short-run equilibrium output