This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: The tax multiplier is most likely to be larger than the expenditure multiplier when ________. A) ... (Read 61 times)

jparksx

  • Hero Member
  • *****
  • Posts: 570
on: Jun 30, 2018
The tax multiplier is most likely to be larger than the expenditure multiplier when ________.
 
  A) monetary policy is at the zero lower bound
  B) rising inflation causes the real interest rate to decline
  C) when the change in tax revenue is large relative to the change in government purchases
  D) the expansionary fiscal policy is expected to be followed by higher taxes

Question 2

What does the Classical model predict about the relationship between a country's budget balance (total revenue minus total spending) and a country's level of real interest rates and investment in a closed economy? Use a graph of the capital
 
  market to illustrate.


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

juicepod

  • Sr. Member
  • ****
  • Posts: 310
Reply #1 on: Jun 30, 2018
Answer to Question 1

D

Answer to Question 2

A higher budget deficit shifts the I+(G-T) curve to the right, increasing real interest rates. Higher real interest rates lead to a reduction in the quantity demanded of investment.


jparksx

  • Member
  • Posts: 570
Reply 2 on: Jun 30, 2018
Gracias!

duy1981999

  • Member
  • Posts: 341
Reply 3 on: Yesterday
:D TYSM

« previous next »
 

Did you know?

Certain topical medications such as clotrimazole and betamethasone are not approved for use in children younger than 12 years of age. They must be used very cautiously, as directed by a doctor, to treat any child. Children have a much greater response to topical steroid medications.

Did you know?

The highest suicide rate in the United States is among people ages 65 years and older. Almost 15% of people in this age group commit suicide every year.

Did you know?

Green tea is able to stop the scent of garlic or onion from causing bad breath.

Did you know?

Stevens-Johnson syndrome and Toxic Epidermal Necrolysis syndrome are life-threatening reactions that can result in death. Complications include permanent blindness, dry-eye syndrome, lung damage, photophobia, asthma, chronic obstructive pulmonary disease, permanent loss of nail beds, scarring of mucous membranes, arthritis, and chronic fatigue syndrome. Many patients' pores scar shut, causing them to retain heat.

Did you know?

Throughout history, plants containing cardiac steroids have been used as heart drugs and as poisons (e.g., in arrows used in combat), emetics, and diuretics.

A freshly applied autograft. Note that the donor skin has been perforated so that it can be stretche A freshly applied autograft. Note that the donor skin has been perforated so that it can be stretche
Although Neandertal brain sizes fall well within the modern human range, their EQ is lower than mode Although Neandertal brain sizes fall well within the modern human range, their EQ is lower than mode
Although males tend to be larger than females, the two overlap significantly in size. The size of a Although males tend to be larger than females, the two overlap significantly in size. The size of a
Notice the small motor gear on the left drives a larger plastic gear (black), which then drives ... Notice the small motor gear on the left drives a larger plastic gear (black), which then drives ...
The Amounts of the Different Minerals in Your Body The major minerals are present in larger amounts The Amounts of the Different Minerals in Your Body The major minerals are present in larger amounts
If 0.40 mol of NaN3 reacts completely in the reaction shown below, then ________ L of N2 will ... If 0.40 mol of NaN3 reacts completely in the reaction shown below, then ________ L of N2 will ...
Video: Electromagnetic Spectrum, Chlorophyll and Pigment & Light

For a complete list of videos, visit our video library