Question

The expenditure approach to measuring GDP suggests that GDP is the total expenditure on goods and...

  1. The expenditure approach to measuring GDP suggests that GDP is the total expenditure on goods and services by households (C), investors (I), government (G) and net exports (X-M). Discuss the economic policies that are implemented by the government to boost the aggregate demand in the Australian economy – mention and discuss one distinct policy for each expenditure items.

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Answer - If the government provides stimulus check to the unemployed persons, during the pandemic , this will result in the increased Consumption of the household. Hence the C component of AD will rise.

When the government provides the subsidies to the businesses , their cost of production decreases because they will not have to bear the full cost of production. As a result they increase their investment in business to increase the supply. This leads to the rise in I component of AD.

When the government purchases a new Aircraft for the Defence purposes , it will be added to the G component of AD. Also this will lead rise in imports.

The policy of the government to provide the export subsidies and creation of SEZ's will lead to rise in exports of country and increase amount of net export which is a component of AD

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
MEASURING ECONOMIC PERFORMANCE: A) The expenditure approach; B) The Income Approach; C) Problems with GDP as...
MEASURING ECONOMIC PERFORMANCE: A) The expenditure approach; B) The Income Approach; C) Problems with GDP as a Measure of Economic Performance
The recession has meant that the actual output of the Australian economy is below the potential...
The recession has meant that the actual output of the Australian economy is below the potential output. The government has already introduced policy measures as you have identified above to boost aggregate demand (AD) and cover the output gap. However, from lecture 7 (Chapter 15) we can conclude that the road to economic recovery in Australia and mitigating the current output gap also requires policies to shift the short-run aggregate supply (SRAS) to the right. Discuss two of the distinct...
3. The recession has meant that the actual output of the Australian economy is below the...
3. The recession has meant that the actual output of the Australian economy is below the potential output. The government has already introduced policy measures as you have identified above to boost aggregate demand (AD) and cover the output gap. However, from lecture 7 (Chapter 15) we can conclude that the road to economic recovery in Australia and mitigating the current output gap also requires policies to shift the short-run aggregate supply (SRAS) to the right. Discuss two of the...
In 2019: Total expenditure on final goods and services by households (C) in nation X =...
In 2019: Total expenditure on final goods and services by households (C) in nation X = 500 ₺; of which 100 ₺ is expenditure on final goods and services produced in other countries; Total expenditure on final goods and services by firms (I) in nation X = 800 ₺; of which 300 ₺ is expenditure on final goods and services produced in other countries; Total expenditure on final goods and services by government (G) in nation X = 800 ₺;...
“Fiscal policy is the government’s attempt to influence economy by setting and changing taxes, transfer payments...
“Fiscal policy is the government’s attempt to influence economy by setting and changing taxes, transfer payments and government expenditure on goods and services to influence the aggregate demand.” Discuss the effects of an in income taxes (contractionary fiscal policy) on the aggregate demand.
Q66. The three approaches to measuring GDP are called the A) Accounting approach, the income approach,...
Q66. The three approaches to measuring GDP are called the A) Accounting approach, the income approach, and the expenditure approach. B) Product approach, the income approach, and the expenditure approach. C) Product approach, the cost approach, and the expenditure approach. D) Accounting approach, the statistical approach, and the income approach. Q67. Assume that, in the population, 388 million people worked for pay last week, 12 million people did not work for pay but had been seeking a job, 5 million...
2. The economy is in a recession. A congresswoman suggests increasing spending to stimulate aggregate demand...
2. The economy is in a recession. A congresswoman suggests increasing spending to stimulate aggregate demand but also at the same time raising taxes to pay for the increased spending. Her suggestion to combine higher government expenditures with higher taxes is: a. The worst possible combination of tax and expenditure changes. b. The best possible combination of tax and expenditure changes. c. A mediocre and contradictory combination of tax and expenditure changes. d. None of the above. After selecting your...
. The difference between expenditure and income approach to measure GDP resides in: A) Expenditure approach...
. The difference between expenditure and income approach to measure GDP resides in: A) Expenditure approach address the question “Who gets income”, while income approach “Who purchases GDP” B) Expenditure approach counts compensation of employees, rents, interest, proprietor’s income and corporate profit, while income approach counts consumption, investment, government spending and net export C) From the spending side 70% of national income is paid in wages and benefits, while from income side 72% consists of consumer expenditures D) The expenditure...
1. the aggregate supply curve shows the negative relationship between general price and real GDP. True...
1. the aggregate supply curve shows the negative relationship between general price and real GDP. True or false 2. Other things equal, as the number of discouraged workers rises in an economy, the gap between potential and actual real GDP will widen. True or False 3. According to the expedenitures approach, gross domestic product represents the sum of consumption spending, government spending, net exports, and net investments. True or False 4. In a business cycle, a peak marks the end...
Given the figures provided, calculate the GDP using the expenditure approach only. Not all figures might...
Given the figures provided, calculate the GDP using the expenditure approach only. Not all figures might be included in the calculation at all. Show your work. a) National income = 1,000 b) consumption = 3,000 c) net private domestic investment = 1,500 d) government purchases = 2,000 e) exports = 500 f) transfer payments by government = 400 g) imports = 800 depreciation = 500 h) corporate income = 1,000
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT