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Author Question: You are advising the Prime Minister. The Prime Minister feels that the current unemployment rate is ... (Read 7231 times)

meagbuch

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on: May 25, 2020

Question 1

Which of the following is NOT an undesirable side-effect of discretionary fiscal policy?
◦ Cuts in spending may harm the poor.
◦ Raising taxes raises prices.
◦ Tax changes could have disincentive effects.
◦ Tax changes may change expectations.

Question 2

You are advising the Prime Minister. The Prime Minister feels that the current unemployment rate is too high and that the unemployment rate can be reduced if aggregate output increases. He/she wants to know what policy to pursue to increase aggregate output by £3 billion. The mpcd is 0.8. Which of the following policies should you recommend?
◦ Increase government spending by £0.6 billion.
◦ Cut taxes by £2.4 billion and to increase government spending by £2.4 billion.
◦ Increase government spending by £2.4 billion.
◦ Cut taxes by £0.6 billion.
Essential Economics for Business ¦ Sloman, Jones ¦ 5th Edition
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Marked as best answer by meagbuch on May 25, 2020

Bison

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Reply #1 on: May 25, 2020
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meagbuch

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Reply 2 on: May 25, 2020
Wow, this really help

scottmt

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Reply 3 on: Yesterday
Great answer, keep it coming :)

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