Suppose that a federal election is called at a time when the economy is experiencing a recessionary gap and there is a budget deficit.The leader of Party A promises, if elected, to immediately balance the budget by slashing government spending.The leader of Party B promises, if elected, to stimulate the economy with a tax decrease.What would be the effect of each party's proposed policy on each of the following.a. the level of GDP.b. the level of NTR.The effect of Party A's proposed policy on:(Click to select)(Click to select)c. the level of unemployment.(Click to select)d. the budget deficit.(Click to select)e. the price level(Click to select)The effect of Party B's proposed policy on:(Click to select)(Click to select)(Click to select)(Click to select)(Click to select)

The objective of the question is to understand the impact of two different economic policies - one…

Answered: Suppose that a federal election is…

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter15: Fiscal Policy

Section: Chapter Questions

Problem 7SQP

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If you were given the chance to make your own 2021 National Budget Plan, which of the executive departments of the Philippines would get the lion's share of the budget? (Note: Please choose the Department of Health since we are in the middle of the pandemic.) GUIDE QUESTIONS Why did you choose that particular department to receive the lion's share of the budget? Explain briefly. What are the projects and programs that should be implemented? Are these revenue expenditures or capital expenditures? Explain. How would be these projects implemented? Are these for the long-term and on a by-phase basis? Where would be the location of the projects? Rural areas and/or urban areas? How long do you see the department getting the lion's share? Justify the forecast. References:https://dbm.gov.ph/images/pdffiles/201229-2021-Budget-at-a-Glance.pdfhttps://www.dbm.gov.ph/wp-content/uploads/BESF/BESF2009/I2.pdfThank you!
Congress would like to increase tax revenues by 5.5 percent. Assume that the average taxpayer in the United States earns $56,000 and pays an average tax rate of 20 percent. Required: If the income effect is in effect for all taxpayers, what average tax rate will result in a 5.5 percent increase in tax revenues? Note: Round your answer to 2 decimal places.
the new equilibrium level of real GDP if government spending increases by $150? 18. What is the new equilibrium level of real GDP if government spending and taxes both increase by $150? 19. Make a graph showing the spending and tax revenue of your state government for as many years as you can find (use the government of your home country if you are not from the United States). What trends do you notice? What spending categories make up the largest share of the state budget? What are the largest sources of revenue?
Compare two fiscal policies: a tax cut on income or an increase in government spending on roads and bridges. What are both the short-term and long-term impacts of such policies on the economy?
TAXES Taxes are any governmental action that reduces the real income of wage-earners as well as non-working Americans. The action can also reduce the profit of business. Taxes act as a leakage from the GDP – Income Stream and will reduce both income and GDP over time. Think of taxes…. Did you buy gas on the way to school? Did it include a tax? When you purchase clothing at the mall, how much is the tax? Driver’s License? Fishing License? Hunting License? Tax on Concert Ticket? Tax on Airline Ticket? Are taxes withheld from your paycheck? Income, FICA and state or local taxes Paying bridge tolls? Taxes on personal or real property? Tax on new tires? Alcohol? Cigarettes? Imports with tariffs? Do all these taxes and licenses reduce our disposable income? Why do we sacrifice and pay these taxes? What are the ways that government helps us?
Fiscal policy is spending and taxation of the executive branch of the federal government; in recessionary times, what initiatives in spending and or taxation are going to help the economy?
Government is considering a policy change to stimulate the economy by encouraging private consumption by reducing sales taxes. The loss of tax revenue will be made up by increasing taxes on corporate profits and excess savings. What are the short- and long-term effects of such a change?
A friend of yours argues that federal government spending is out of control and significant cuts in spending are needed to reduce the size of the government. She tells you that if we cut federal government spending on research and foreign aid, it will really reduce the size of the government. Refer to Figure 2 in the text for information on the budget. a. What percentage of federal government spending comes from research and foreign aid? b. How much will the federal government spend on research and foreign aid if the federal government's total spending is $1.2 trillion.
Our federal government establishes a budget that determines what programs and services can be provided and how to pay for these programs and services. How does fiscal policy differ from the federal government establishing a budget? How does fiscal policy prevent a recession? What are some fiscal policy options for moving the economy out of a recession?
Should the government fight recessions with spending hikes rather than tax cuts ? Explain.
Which of the following best describes a fiscal policy tool? 1. Government spending II. Government taxes III. Interest rates. IV. Bank lending V. Financial capital markets I and II I and VI III, IV, and V
How do you recommend the government change GDP and taxes to stabilize the economy in each of the following scenarios? Economic growth has started slowing and the unemployment rate has increased over the past four months. There has been strong growth in GDP over the past year, unemployment is very low, and inflation has started to rise. Prices are stable, unemployment is low and the economy is growing at an average rate.

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