Question

9: Automatic Stabilizers

are fiscal policies work more slowly than regular fiscal policies?

are fiscal policies that require no new legislation.

cause the government budget to be balanced every year.

all of the above.

C = 4000 + .75                                                                                                

I = 1200

G = 1500

10.       For the above economy, the equilibrium level of output is:

$ 26,800

$    6,700 + .75Y

$    6,700

$    5,025

11.       Still using the above economy, how much would government purchases have to change to achieve full employment it full employment were $30,000?

$   3200

$   5825

$     800

$- 6243.75

12: Which of the following would be consistent fiscal policies to fight unemployment?

a. lower taxes and raise government purchases.

b. raise transfer payments and lower government purchases.

c. raise taxes and raise transfer payments.

d. lower government purchases and raise transfer payments.

Answer 1