Fiscal policy changes would have a larger

Assignment Help Microeconomics
Reference no: EM13656546

Which of the following fiscal policy changes would have a larger overall negative impact on AD and RGDP? Explain your answer in a paragraph or two with credible logics and analysis.

A) A program of tax hike, distributed uniformly across the households earning over $300K annually filing tax returns, amounting to $85 billion in total tax hikes.

Alternatively,
B) An $85 billion sequester (called automatic federal government spending cut) that went into effect on March 1, 2013. This was an across-the-board spending cut in federal government's various existing programs and services, including maintenance of major infrastructures and aviation traffic control systems.

Note: You may also use the AD-AS diagram as part of your analysis, but not required. However, explaining the answer with the concept of multiplier effects for these two alternative options is the right way to address this question.

Reference no: EM13656546

Questions Cloud

Described as the application of learning theory : Behavior modification is described as the application of learning theory. What distinguishes a behaviorist from other types of theorists? Your answer should also discuss and explain: reinforcer, positive reinforcement, negative reinforcement, ..
What is shock incarceration : What is shock incarceration
What does title vii of the civil rights act of 1964 : What does Title VII of the Civil Rights Act of 1964 dictate to employers in regards to considering an ex-convict for employment?
Compute the isentropic thermal efficiency : Steam enters a turbine in a Rankine cycle power plant at 200 psia and 500 degrees F. Compute the isentropic thermal efficiency if the condenser pressure is 14.7 psia
Fiscal policy changes would have a larger : Which of the following fiscal policy changes would have a larger overall negative impact on AD and RGDP? Explain your answer in a paragraph or two with credible logics and analysis.
Decide rate of entropy production in this solar concentrator : A solar concentrating heat exchanger system directs sunlight onto a long straight pipe. The pipe receives heat from sunlight at the rate of 153.616 Btu/hr per foot of length. Water enters the pipe at 50 lbm/hr as saturated liquid at 300 degrees F and..
Summary of a recent news story : Summary of a recent news story and explain how it relates to the 10 principles of economics.
200 million euros due one year from now, : If your company has a payment of 200 million euros due one year from now, how would you hedge the foreign exchange risk in this payment with 125,000-euro futures contracts?
Stream of singly ionized gold atoms pouring from small oven : A stream of singly ionized gold atoms pouring from a small oven impinges on a metal target. The target is attatched to the positive terminal of a 12V battery and oven is attatched to the negative terminal. How much kinetic energy do the ions pick up ..

Reviews

Write a Review

 

Microeconomics Questions & Answers

  Describe what results of such a move are for graham cracker

assume you are a policymaker in washington dc. lobbyists for the preschoolers of america have put pressure on their

  Two non-identical firms a b produce identical products for

two non-identical firms a b produce identical products for sale in a market. market inverse demand is p 12 - 2q. the

  What events toward end of 19th century enabled general

what events toward the end of the 19th century enabled general interest magazines to become mass circulation magazines?

  Describe each model and explain how each of the models vary

there are two contrasting theories of physician behavior. the first is the traditional model and the second is referred

  Multiplenbspchoice 1 the baseline level of consumption coa

multiplenbspchoice 1. the baseline level of consumption coa. is the amount by which consumption spending changes in

  How does industry-level price elasticity of demand shape

How does industry-level price elasticity of demand shape the opportunities for making a profit in an industry? How does firm-level price elasticity of demand do it?

  Provide economic reasoning and draw graphsa suppose the

provide economic reasoning and draw graphsa suppose the economy is initially in long run equilibrium and the u.s. stock

  How does the amount of unemployment created by an increase

How does the amount of unemployment created by an increase in the minimum wage depend on the elasticity of labor demand do you think an increase in the minimum wage will have a greater unemployment effect in the fast-food industry or in the lawn-c..

  How does a high rate of inflation affect money

1)How does a high rate of inflation affect money in all its different roles?

  Find the coupon rate of the bond

A $19,200 mortgage bond that is due in one year pays interest of $600 every three months.1. Find the coupon rate of the bond. ____ I found b=0.125 2. Find the present value of one of these bonds. (Ignore past activity; consider future interest pa..

  What happens to the indifference curves

What happens to the indifference curves when a household's income is reduced and how does a budget constraint explain consumer choices when used in conjunction with indifference curves?

  Define and describe the difference between absolute

define and explain the difference between absolute advantage and comparative advantage. what is the significance of

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd