Question

1. The crowing out effect of government spending will be less pronounced if Select one: a....

1. The crowing out effect of government spending will be less pronounced if

Select one:

a. consumption spending is more sensitive to changes in the interest rate

b. government borrows mostly in the international financial markets

c. none of the answers is correct

d. equilibrium GDP is further below potential GDP

2. Monetary policy response to the Coronavirus crisis in Australia can be expected to

Select one:

a. prevent, among other things, large increase in unemployment

b. slow down aggregate demand growth

c. all answers are correct

d. cause, ceteris paribus, Australian dollar to appreciate

3. Jenny is a cook at a restaurant and her hourly wage is $200. For her husband’s birthday, she cooks an elaborate meal at home that takes her 5 hours to complete. As a result, the country’s GDP

Select one:

a. remains the same

b. decreases by $1000

c. increases by $1000

d. might increase or decrease, depending on her income tax rate

4. To stimulate the economy Australian government buys more of the Australian made submarines. How will this affect the aggregate demand curve?

Select one:

a. This will shift the aggregate demand curve to the right.

b. This will move the economy down along a stationary aggregate demand curve.

c. This will move the economy up along a stationary short run aggregate supply curve.

d. This will move the economy up along a stationary aggregate demand curve.

Homework Answers

Answer #1

1) option c)

Crowding out effect occurs, when due to fiscal Expansion, interest rate rises, & so Investment falls,

Thus full effect of Expansionary fiscal policy is not realized

So a) false, if C responses more to i, then crowding out effect is more pronounced

So all options are wrong

2) option a)

Monetray expansion should be undertaken to Decrease Unemployment rates

3) option a)

Home activities arent part of GDO calculation

4) option a)

G rises , AD shifts right

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
The recession of 2007-2009 made many consumers pessimistic about their future incomes. How does this increased...
The recession of 2007-2009 made many consumers pessimistic about their future incomes. How does this increased pessimism affect the aggregate demand curve? A) This will move the economy up along a stationary aggregate demand curve. B) This will move the economy down along a stationary aggregate demand curve. C) This will shift the aggregate demand curve to the left. D) This will shift the aggregate demand curve to the right. Explanation on the answer will really be helpful.
1. A cut in government spending, a decrease in income abroad, an increase in taxes, or...
1. A cut in government spending, a decrease in income abroad, an increase in taxes, or an expectation that future consumer income will fall will all cause aggregate: A) demand to shift rightward. B)demand to shift leftward. C)supply to shift rightward. D)supply to shift leftward. E) supply and aggregate demand to both shift equally inward. 2. A decrease in aggregate supply can result in: A) Unemployment B) demand- pull inflation C) prosperity D) cost- push inflation E) a recession 3.A...
In the intermediate range of the aggregate supply curve, if government spending increases caused the aggregate...
In the intermediate range of the aggregate supply curve, if government spending increases caused the aggregate demand curve to shift outwards, which of the following is most likely to occur? a. The price level and real GDP will both rise. b. Both the price level and real GDP will not change. c. The price level will rise, but real GDP will not change. d. The price level will not change, but real GDP will increase.
1. Suppose that as a result of the government policy we expect a permanent decrease in...
1. Suppose that as a result of the government policy we expect a permanent decrease in the flow of migrant workers into the United States. As a result, we can expect Select one: a. a right-ward shift in the short-run aggregate supply curve b. a right-ward shift in the aggregate demand curve c. a left-ward shift in the long-run aggregate supply curve d. this will not have any effect on the US economy in the short or long run 2....
1.) In tracing out a price consumption curve for a good x, which of the following...
1.) In tracing out a price consumption curve for a good x, which of the following variables are held constant? Select all that apply a.) consumer income b.) consumption of y. c.) the price of good x d.) utility e.) the price of good y 2.) The demand curve maps out a.) the optimal quantities of x and y change as income changes, ceteris paribus. b.) the optimal quantity of one good and the price of that good, ceteris paribus....
1. Fiscal policy primarily affects macroeconomic equilibrium in the economy by Select one: a. changing the...
1. Fiscal policy primarily affects macroeconomic equilibrium in the economy by Select one: a. changing the Short-Run Aggregate Supply b. changing the Aggregate Demand c. changing the Long-Run Aggregate Supply d. all answers are correct 2. Suppose that the real GDP is $14 trillion, potential GDP is $16 trillion and taxes were cut by 500 billion to bring economy to the full employment. The implied value of the tax multiplier is Select one: a. 2 b. -4 c. 1.6 d....
9. Which of the following statements about inflation is correct? Select one: A.Inflation means goods and...
9. Which of the following statements about inflation is correct? Select one: A.Inflation means goods and services are more expensive to purchase B.Inflation and unemployment increase and decrease together C.The unemployment rate and GDP level have no relationship to the inflation rate D. High inflation is always better than low inflation 5. If a 4% increase in the price of gin leads to a 0.8% decrease in demand, then the price elasticity of demand for gin is Select one: A.5.0...
1.   Which one of the following shifts the aggregate demand curve leftward? Select one: a. An...
1.   Which one of the following shifts the aggregate demand curve leftward? Select one: a. An increase in the wage rate. b. An increase in the price level. c. An increase in expected deflation. d. A decrease in taxes. e. A decrease in the interest rate. 2.   Consider an economy starting from a position of full employment. Which one of the following changes does not occur as a result of an increase in aggregate demand? Select one: a. Real GDP...
The crowding out effect is zero if Select one: a. the LM-curve is vertical b. the...
The crowding out effect is zero if Select one: a. the LM-curve is vertical b. the central bank conducts open market sales following fiscal expansion c. income is stimulated via a tax cut rather than an increase in government spending d. the central bank conducts open market purchases following fiscal expansion e. the LM-curve is horizontal An asset (other than money) is considered to be more liquid if Select one: a. it can be quickly and cheaply transferred into money...
24) An increase in government spending will likely have which of the following effects? A) a...
24) An increase in government spending will likely have which of the following effects? A) a rightward shift in the IS curve B) a leftward shift in the IS curve C) an upward shift in the LM curve D) a downward shift in the LM curve 25) If government spending and taxes increase by the same amount, A) the IS curve does not shift B) the IS curve shift leftward C) the IS curve shifts rightward D) the LM curve...