What is the appropriate contractionary fiscal policy response when inflation goes from 4% to 12% annual rate and real GDP rises from 3% to 12%?
What is the appropriate contractionary fiscal policy response when inflation goes from 4% to 12% annual rate and real GDP rises from 3% to 12%?
Related textbook solutions
Related questions
1. If government tax policy requires Jane to pay $28,000 in taxes on an annual income of $200,000 and Mary to pay $10,000 in tax on the annual income of $100,000, then the tax policy is:
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regressive. |
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progressive. |
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proportional. |
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optional. |
2. When increasing oil prices cause aggregate supply to shift to the left, then:
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unemployment and inflation decrease. |
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unemployment decreases and inflation increases. |
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unemployment and inflation increase. |
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unemployment increases and inflation decreases. |
3. What do goods like gasoline, tobacco, and alcohol typically share in common?
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A progressive tax is imposed on each of them. |
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A regressive tax is imposed on each of them. |
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They are all subject to government excise taxes. |
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They are all subject to government fiscal taxes. |
4. When inflation begins to climb to unacceptable levels in the economy, the government should:
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use contractionary fiscal policy to shift aggregate demand to the right. |
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use contractionary fiscal policy to shift aggregate demand to the left. |
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use expansionary fiscal policy to shift aggregate demand to the right. |
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use expansionary fiscal policy to shift aggregate demand to the left. |
