3.6 Demand management—fiscal policy

Define the term fiscal policy indicated in bold in the text (paragraph [5]).

Define the term fiscal policy indicated in bold in the text (paragraph [5]).

Define the term fiscal policy indicated in bold in the text (paragraph [5]).

Explain two goals of fiscal policy.

Explain two goals of fiscal policy.

Explain two goals of fiscal policy.

Explain how expansionary fiscal policy could be used to close a deflationary (recessionary) gap.

Explain how expansionary fiscal policy could be used to close a deflationary (recessionary) gap.

Using an AD/AS diagram, explain how the use of fiscal policy could lower “the high rates of youth unemployment” in South Korea (paragraph [5]).

Using an AD/AS diagram, explain how a reduction in government spending may reduce inflation (Text D, paragraph [4]).

Using real-world examples, evaluate the use of fiscal policy to close a deflationary/recessionary gap.

Using an AD/AS diagram, explain how the use of fiscal policy could lower “the high rates of youth unemployment” in South Korea (paragraph [5]).

Using an AD/AS diagram, explain how the use of fiscal policy could lower “the high rates of youth unemployment” in South Korea (paragraph [5]).

Using an AD/AS diagram, explain how a reduction in government spending may reduce inflation (Text D, paragraph [4]).

Using an AD/AS diagram, explain how a reduction in government spending may reduce inflation (Text D, paragraph [4]).

Using real-world examples, evaluate the use of fiscal policy to close a deflationary/recessionary gap.

Using real-world examples, evaluate the use of fiscal policy to close a deflationary/recessionary gap.

Explain how expansionary fiscal policy could be used to close a deflationary (recessionary) gap.

Explain how expansionary fiscal policy could be used to close a deflationary (recessionary) gap.

Explain how expansionary fiscal policy could be used to close a deflationary (recessionary) gap.

Explain how expansionary fiscal policy could be used to close a deflationary (recessionary) gap.

Calculate the maximum possible increase in gross domestic product (GDP) that could result from the rise in investment.

Country Delta is an open economy with a government sector. Investment rises by $2 billion in both Delta and Beta. Explain how the size of the multiplier and the resulting effect on gross domestic product (GDP) might be different in the two countries.

Using the concept of the multiplier, explain how an increase in investment might affect aggregate demand.

Using this information, calculate the value of the Keynesian multiplier.

Using your answer to part (i), calculate the increase in government spending necessary to increase nominal GDP by $100 billion.

Explain the effect an increase in investment might have on real gross domestic product (GDP) using the Keynesian multiplier.

Gardia’s investment (in plant and equipment) increased by 11 million gamma in the last month. In the same month, its government spending decreased by 8 million gamma. It has been estimated that the marginal propensity to consume (MPC) on domestic goods and services in Gardia is 0.75.

Calculate the maximum possible increase in real gross domestic product (GDP) in Gardia that could result from the changes in investment and government spending.

Calculate the estimated value of the multiplier used by the economist.

Calculate the estimated value of the multiplier used by the economist.

Using this information, calculate the value of the Keynesian multiplier.

Using your answer to part (i), calculate the increase in government spending necessary to increase nominal GDP by $100 billion.

Using this information, calculate the value of the Keynesian multiplier.

Using your answer to part (i), calculate the increase in government spending necessary to increase nominal GDP by $100 billion.

Explain the effect an increase in investment might have on real gross domestic product (GDP) using the Keynesian multiplier.

Explain the effect an increase in investment might have on real gross domestic product (GDP) using the Keynesian multiplier.

Gardia’s investment (in plant and equipment) increased by 11 million gamma in the last month. In the same month, its government spending decreased by 8 million gamma. It has been estimated that the marginal propensity to consume (MPC) on domestic goods and services in Gardia is 0.75.

Calculate the maximum possible increase in real gross domestic product (GDP) in Gardia that could result from the changes in investment and government spending.

Gardia’s investment (in plant and equipment) increased by 11 million gamma in the last month. In the same month, its government spending decreased by 8 million gamma. It has been estimated that the marginal propensity to consume (MPC) on domestic goods and services in Gardia is 0.75.

Calculate the maximum possible increase in real gross domestic product (GDP) in Gardia that could result from the changes in investment and government spending.

Calculate the estimated value of the multiplier used by the economist.

Calculate the estimated value of the multiplier used by the economist.

Calculate the estimated value of the multiplier used by the economist.

Calculate the estimated value of the multiplier used by the economist.

Calculate the maximum possible increase in gross domestic product (GDP) that could result from the rise in investment.

Country Delta is an open economy with a government sector. Investment rises by $2 billion in both Delta and Beta. Explain how the size of the multiplier and the resulting effect on gross domestic product (GDP) might be different in the two countries.

Calculate the maximum possible increase in gross domestic product (GDP) that could result from the rise in investment.

Country Delta is an open economy with a government sector. Investment rises by $2 billion in both Delta and Beta. Explain how the size of the multiplier and the resulting effect on gross domestic product (GDP) might be different in the two countries.

Using the concept of the multiplier, explain how an increase in investment might affect aggregate demand.

Using the concept of the multiplier, explain how an increase in investment might affect aggregate demand.

Evaluate government policies to deal with the different types of unemployment.

The government in Country Alpha reduces income taxes in 2019.
Using information from the graph to support your answer, explain the likely effect on the inflation rate and the unemployment rate.

To what extent is expansionary fiscal policy the best policy to achieve a reduction in the rate of unemployment?

Explain two reasons why fiscal policy may prove effective in lifting an economy out of a deep recession.

Evaluate the effectiveness of fiscal policy as a means of achieving long-term economic growth.

Using real-world examples, evaluate the effectiveness of monetary policy to achieve low unemployment.

Using real-world examples, evaluate the use of fiscal policy to close a deflationary/recessionary gap.

Using an AD/AS diagram, explain how crowding out may help control inflationary pressure in Tanzania (Text A, paragraph [5]).

Explain two reasons why fiscal policy may prove effective in lifting an economy out of a deep recession.

Explain two reasons why fiscal policy may prove effective in lifting an economy out of a deep recession.

Evaluate the effectiveness of fiscal policy as a means of achieving long-term economic growth.

Evaluate the effectiveness of fiscal policy as a means of achieving long-term economic growth.

Using real-world examples, evaluate the effectiveness of monetary policy to achieve low unemployment.

Using real-world examples, evaluate the effectiveness of monetary policy to achieve low unemployment.

Using real-world examples, evaluate the use of fiscal policy to close a deflationary/recessionary gap.

Using real-world examples, evaluate the use of fiscal policy to close a deflationary/recessionary gap.

Using an AD/AS diagram, explain how crowding out may help control inflationary pressure in Tanzania (Text A, paragraph [5]).

Using an AD/AS diagram, explain how crowding out may help control inflationary pressure in Tanzania (Text A, paragraph [5]).

Evaluate government policies to deal with the different types of unemployment.

Evaluate government policies to deal with the different types of unemployment.

The government in Country Alpha reduces income taxes in 2019.
Using information from the graph to support your answer, explain the likely effect on the inflation rate and the unemployment rate.

The government in Country Alpha reduces income taxes in 2019.
Using information from the graph to support your answer, explain the likely effect on the inflation rate and the unemployment rate.

To what extent is expansionary fiscal policy the best policy to achieve a reduction in the rate of unemployment?

To what extent is expansionary fiscal policy the best policy to achieve a reduction in the rate of unemployment?