Which of the following is the most likely effect if the government was to increase spending? Responses an increase in bonds an increase in bonds a deflationary gap a deflationary gap a decrease in interest rate a decrease in interest rate a decrease in inflation rate

Which of the following is an effect of deflation on debt? a) Debt becomes easier to repay b) Debt becomes more burdensome c) Debt levels remain unchanged d) Debt becomes irrelevant

what is the effects of indirect taxes on inflation and demand.

An economy is at full employment. Which of the following can create an inflationary gap. Group of answer choices An increase in nominal wages. An increase in income taxes. An increase in government spending. A decrease in government spending.

Suppose that the government decreases spending more than is necessary to close an inflationary gap. What is the MOST likely result? Inflation will increase. The price level will increase. Aggregate output will fall short of potential output. Aggregate output will increase.

What policy might the federal government implement with regard to taxes and spending to help stop the economy from falling into recession?

What are some reasons that the economy might be in a recession, and what is the appropriate government action to alleviate the recession?

Evaluate the policy options open to a government when the Government wants to close a deflationary gap (negative output gap) and reduce unemployment.

If the economy is in a recessionary period how, specifically, might the government use their three tools?  three tools change the tax rate  change the level of govertment spending change transfer payments

1.4. The deflationary gap in an economy is calculated to be $700 billion. The marginal propensity to save (MPS) is 0.1 The marginal propensity to import is (MPM) 0.15 The marginal rate of taxation is (MPT) 0.1. By how much would the government need change its spending on goods and services to eliminate the deflationary gap?   1.5. How does CHANGE in PRICES effect your lives?   1.6. Explain why INFLATION usually accelerates during wartime? Macroeconomics and the goals of Macroeconomic policy