Define what are the automatic stabilizers

Reference no: EM13202507

Our economy is currently in recession so let's discuss how discretionary Fiscal Policy can help the situation. Please explain why tax cuts may be needed now and why we see budget deficits going up during the recession. What is the 'Crowding Out' effect? What are the 'Automatic Stabilizers'? What impact do they have on the economy?

Reference no: EM13202507

Questions Cloud

Find the new m2 money multiplier : On January 1 2011: C/D = 0.2 T/D = 1.8 ER/D = 0.3 MB = USD. 12000000 Required reserve ratio on checkable deposits = 0.10 Required reserve ratio on time deposits = 0.07 These ratios have been defined in class and are assumed constant.

Calculate appropriate percents to describe the results : c) Summarize your findings in a short paragraph d) Test the null hypothesis that there is no association between gender and lying to teachers. Give the test statistic, the P-value and summarize your conclusion. Be sure to include numerical and gra..

Is there much price competition in an oligopolistic market : Oligopolists are interdependent firms. What is mean by that Explain "strategic behavior" and relate that to the "Kinked Demand" model of oligopoly. Explain the importance of mergers in oligopolistic markets. Is there much price competition in an ..

How does this relate to keynesian economics : Assume that Country A has a population of 500,000 and only produces one good-cars. Country A produces 100,000 cars per year. The people in Country A purchase 90,000 cars, but there are not enough cars to fulfill all the demand. They decide to impo..

Define what are the automatic stabilizers : Our economy is currently in recession so let's discuss how discretionary Fiscal Policy can help the situation. Please explain why tax cuts may be needed now and why we see budget deficits going up during the recession. What is the 'Crowding Out' e..

Working capital financing policies : Finance permanent net working capital with equity and temporary net working capital with a short-term loan at 12% and calculate the cost of each option. Which would you choose? Why?

How did the recent financial crisis affect financial service : What factors led to the mortgage default crisis How did mortgage defaults affect banks involved in mortgage lending and mortgage investing Securitization TARP What do these mean How did mortgage-backed securities spread losses during the mortgage ..

What utility levels will smith and jones enjoy : Jones on the other hand regards ham and cheese as perfect substitutes-she is always willing to trade 3 slices of ham for 4 slices of cheese, and her utility function is given by Uj+4h+3c. Total endowments are 100 slices of ham and 200 slices of ch..

Determine who will bear the burden of the tax : Assume that Milk is perfectly elastically. If there is a $.20 tax on milk, who will bear the burden of the tax Assume producers have the legal incidence. Graphically depict and describe. Shade the loss in consumer's surplus. and deadweight loss.

User Account

All Pages