Fiscal Policy

  1. How could the existence of unemployment benefits or other transfer programs reduce the

severity of an economic contraction?

  1. Refer to the figure below and answer the following questions.

2a. Given that the economy has moved from A to B what would be the appropriate

Don't use plagiarized sources. Get Your Custom Essay on
Fiscal Policy
Order Essay

fiscal policy to achieve potential GDP and why?

2b. If fiscal policy is successful at moving the economy from point B to equilibrium at

potential GDP, which of the following will occur and why?

  1. Identify each of the following as (i) part of an expansionary fiscal policy, (ii) part of a

contractionary fiscal policy, or (iii) not part of fiscal policy.

3a.  The personal income tax rate is lowered.

3b.  The government increases spending on defence due to a change in spending


3c.  The company income tax rate is lowered.

3d.  The State of New South Wales builds a new tollway in an attempt to expand

employment and ease traffic congestion.

  1. Using the following table, answer the following questions. The numbers in the table are in

billions of dollars.

Real GDP Consumption Planned




500 400 100 150 -50

600 450 100 150 -50

700 500 100 150 -50

800 550 100 150 -50

4a.  What is the equilibrium level of real GDP?

4b.  What is the MPC?

Net Exports

4c.  If investment spending declines by 50, what will happen to equilibrium GDP?

  1. Suppose the current equilibrium GDP for a country is $14.5 trillion and potential GDP is

$14.3 trillion. Will decreasing government purchases by $200 billion or raising taxes by

$200 billion restore the economy to potential GDP? Briefly explain why.

Grand Paper Writers
Order NOW For A 10% Discount!
Pages (550 words)
Approximate price: -

Our Advantages

Plagiarism Free Papers

All papers are written by the best professional writers to ensure 100% originality. We always provide plagiarism reports whenever we deliver completed papers.

Free Revisions

All papers by Grand Paper Writers are completed and submitted on time. This timely delivery of papers gives you time to go through the paper before the official deadline.


As an additional service, we will provide a title page that precedes the contents of your paper. Here, you will provide your personal details.


We also ensure that we provide an extra page for the references or bibliographies following referencing rules.

Originality & Security

At, we guarantee students for the provision of security and original work. All your personal information is handled with confidentiality and is not shared with third parties. Additionally, we ensure that we provide original content with accompanying plagiarism reports to show originality.

24/7 Customer Support

Our customer support team is always available 24/7 to provide instant responses to any queries raised by students.

Try it now!

Calculate the price of your order

We'll send you the first draft for approval by at
Total price:

How it works?

Follow these simple steps to get your paper done

Place your order

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Receive the final file

Once your paper is ready, we will email it to you.

Our Services has the best professional essay writers for quality services.


Flexible Pricing

Here, a, we do not compromise on the time of our clients. We always deliver all completed papers on or before the deadlines.


Admission Help & Client-Writer Contact provides an interactive portal where students can communicate directly to their writers.


Paper Submission

Here, a, we do not compromise on the time of our clients. We always deliver all completed papers on or before the deadlines.


Customer Feedback appreciates feedback from our clients to help us improve the delivery of essay writing services. As such, we are constantly changing our policies to ensure maximum customer and writer satisfaction.