Aggregate Demand and Aggregate Supply (Graded
Go to the BEA website www.bea.gov. On the left tab under Publications, go to the Interactive Data Tables. Select National Income and Product Accounts. From Table 1.1.6 and 1.1.7 examine all four components of GDP (C, I, G, and Xn. Which of these four components of AD declined the most during the 2007 and 2009 recession? Do you think an increase in government's spending (G can boost the Aggregate Demand (AD in a recession? Analyze why the economy may operate below full-employment GDP in the short run. How can the multiplier have a negative effect? What is the relationship between the multiplier and the marginal propensities? Explain.
Fiscal policy refers to the
Suppose that the economy is in the midst of a recession. Which of the following policies would most likely end the recession and stimulate output growth?
The crowding-out effect of expansionary fiscal policy suggests that
Which of the following would not shift the aggregate supply curve?
Other things equal, a reduction in personal and business taxes can be expected to
The MPC can be defined as that fraction of a Dissaving means
Refer to the graph. Which of the following factors will shift AD1 to AD3?
The multiplier is
The American Recovery and Reinvestment Act of 2009 was implemented primarily to
What effect would each of the following have on aggregate demand or aggregate
Why do some economists believe that tax cuts are critical to help revive an economy experiencing a recession?
Expansionary fiscal policy is so named because it
An economist who favors smaller government would recommend
The lag between the time and the need for fiscal action is recognized and the time the action is taken is referred to as the
The determinants of aggregate supply Other things equal, a reduction in personal and business taxes can be expected to
The MPC can be defined as that fraction of a
The size of the MPC is assumed to be
Refer to the graph. Which of the following factors will shift AD1 to AD3?
The multiplier can be calculated as:
The American Recovery and Reinvestment Act of 2009
What effect would each of the following have on aggregate demand or aggregate supply? Explain. a. A reduction in personal income
tax. b. An increase in payroll taxes paid by the employer
Why do some economists believe that tax cuts are critical to help revive an economy experiencing a recession?