{"id":174159,"date":"2018-02-20T23:50:30","date_gmt":"2018-02-20T23:50:30","guid":{"rendered":"https:\/\/writemyessayfree.com\/just-a-discussion-question-economics"},"modified":"2018-10-24T09:11:27","modified_gmt":"2018-10-24T09:11:27","slug":"just-a-discussion-question-economics","status":"publish","type":"post","link":"https:\/\/www.benedictsol.com\/blogs\/just-a-discussion-question-economics\/","title":{"rendered":"just a discussion question economics"},"content":{"rendered":"<p><b>&#8220;Fiscal Policy&#8221;&amp;nbsp;<\/b>Please respond to the following:<\/p>\n<ul>\n<li>Which fiscal policy measure is more likely to have a greater impact on the economy when unemployment is rising and&amp;nbsp;consumer confidence is falling&amp;nbsp;-&amp;nbsp;an increase in government spending or an equal decrease in taxes?&amp;nbsp;Explain your reasoning.<\/li>\n<\/ul>\n<p>Optional:&amp;nbsp;&amp;nbsp;Assuming,&amp;nbsp;in a simple economy with no net exports,&amp;nbsp;&amp;nbsp;the marginal propensity to consume&amp;nbsp;(MPC)&amp;nbsp;&amp;nbsp;is&amp;nbsp;0.8.&amp;nbsp;This would generate a government spending multiplier of&amp;nbsp;5.0&amp;nbsp;&amp;nbsp;and a tax multiplier of&amp;nbsp;-4.0&amp;nbsp;.&amp;nbsp;&amp;nbsp;If government spending increased by&amp;nbsp;$100&amp;nbsp;million,&amp;nbsp;what would the impact be on total spending in the economy?&amp;nbsp;&amp;nbsp;If instead,&amp;nbsp;taxes were reduced by the same amount,&amp;nbsp;&amp;nbsp;$100&amp;nbsp;million,&amp;nbsp;what would the impact be on total spending in the economy?&amp;nbsp;&amp;nbsp;Could the government run a balanced budget&amp;nbsp;(increasing&amp;nbsp;government&amp;nbsp;spending and taxes by the same amount)&amp;nbsp;and still grow the economy?&amp;nbsp;&amp;nbsp;<\/p>\n<p>[Note:&amp;nbsp;&amp;nbsp;Government Spending Multiplier is&amp;nbsp;1\/(1-MPC)&amp;nbsp;&amp;nbsp;and Tax Spending Multiplier is&amp;nbsp;-&amp;nbsp;MPC&amp;nbsp;\/(1-MPC)&amp;nbsp;.&amp;nbsp;&amp;nbsp;&amp;nbsp;The tax spending multiplier is negative because an increase in taxes would cause spending to fall while a decrease in taxes&amp;nbsp;would cause&amp;nbsp;spending&amp;nbsp;to rise.&amp;nbsp;]&amp;nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;Fiscal Policy&#8221;&amp;nbsp;Please respond to the following: Which fiscal policy measure is more likely to have a greater impact on the economy when unemployment is rising and&amp;nbsp;consumer confidence is falling&amp;nbsp;-&amp;nbsp;an increase in government spending or an equal decrease in taxes?&amp;nbsp;Explain your <a href=\"https:\/\/www.benedictsol.com\/blogs\/just-a-discussion-question-economics\/\" class=\"read-more\">Read More &#8230;<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-174159","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/174159","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/comments?post=174159"}],"version-history":[{"count":0,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/174159\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/media?parent=174159"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/categories?post=174159"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/tags?post=174159"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}