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An expansionary fiscal policy might include __________ government spending and/or __________ taxes, while a contractionary fiscal policy might include __________ government spending and/or __________ taxes.
increasing; decreasing; decreasing; increasing
decreasing; decreasing; increasing; increasing
decreasing; increasing; increasing; decreasing
increasing; increasing; decreasing; decreasing
The supply-side effects of fiscal policy shows that an increase in the marginal tax rate on labour
income will do the following:
A. Decreases potential GDP.
B. Increases potential GDP because people work more as they have less disposable income.
C. Increase the incentive to work.
D. Increase the equilibrium quantity of labour as firms demand more workers at the lower wage.
4. An expansionary fiscal policy would most likely cause which of the following changes in output and
interest rates?
A. Both output and interest rate will increase
B. Output will increase and interest rate falls.
C. Output will fall and interest rate increase.
D. Both output and interest rate will decrease
Considering automatic stabilizer, which of the following is likely to increase the South African
government’s existing budget deficit?
I. A decrease in real GDP.
II. Lower unemployment rate.
III. A decrease in the price level.
A. I only
B. II only
C. II and III only
D. I, II and III
You’re given the following data concerning Freedonia, a legendary country:
1) Consumption function: C=200+0.8Y
2) Investment function: I=100
3) AE=C+I
4) AE=Y
a. What is the marginal propensity to consume in Freedonia, and what is the marginal propensity to save?
b. Graph equations (3) and (4) and solve for equilibrium income.
c. Suppose aquation (2) is changed to (2’) I=110. What is the new equilibrium level of income? By how much does the $10 increase in planned investment change equilibrium income? What is the value of multiplier?
d. Calculate the saving function for Freedonia. Plot this saving function on a graph with equation (2). Explain why the equilibrium income in this graph must be the same as in part b.
Can you explain the Fama-French 3 and 5 factor model with math examples?
Can you explain the paper 'Bad Beta, Good Beta' Campbell, J.Y., & Vuolteenaho, T. 2004 ? With math explanation or example
In the CIA World Fact Book, GDP per capita in the United States in 2010 was approximately $47,400. The formula for growth used in that spreadsheet for any given year, yt, is yt = y0 (1 + g)t, where y0 is the value of GDP in the beginning year, yt is the value of GDP for the specific year in question, and t is the number of years after y0. If y0 is GDP per capita in 2010 and the economy continues to grow at approximately 3% as it did in 2010, what will be the value of GDP per capita in ten years?
Suppose Mr. Alemu consumes two commodities, X and Y. The income of Mr.Alemu is $200, and price of X is 5 and the price of Y is 15. The demand function for the comnmodity is given as:
Qx=100-0.75)y +0.251px1/3 + 2p3/2
where Qx is quantity demand of commodity X. 7Px is the price of commodity X, p, is
the price of commodity Y and I is income.
Then:
A. Find the price elasticity of demand. Decide whether it is elastic, unitary clastic or
