QUESTION 8 1 points Save An economist who favored expanded government would reco

Question

QUESTION 8 1 points Save An economist who favored expanded government would recommend: recession and reductions in government spending during inflation. O tax increases during rocession and tax cuts during inflation tax cuts during recession and tax increases during iMation. O incroanes in government spending during recession and tax increases during inflation. QUESTION 9 1 points Save A Which of the following statements is correct? °Federal deficits were larger in the early 2000s than in the late 2000s. Quesicn Completo Deep tax cuts always expand tax revenues and reduce the public debt. O The public debt has usually declined during wartime There is a tendency for the public debt to grow during recessions. 1 points Save A QUESTION 10 Which of the following steps would be considered the decision lag time (1) The index of economic indicators turns downward for three consecutive months, suggesting the possibility of a agreement that the economy is moving into a recession: (3) Congress and the President months the tax cuts has result in an increase in consumption spending and the recession; (2) After a few months the economists reach t take four months to agree on a tax cut to help stimulate the economy; (4) After six economy begins to recover. 01 t peints Save Ann QUESTION 11 Answer the question using the following budget information for a hypothetical economy. Assume that al budget surpluses are used to paty down the public deot Government

Explanation / Answer

8. Option A

Expansionary policy would mean reduction in taxes so to increase in the dispsable income during the recessionary phase. Also, during the inflation, the reduction in government spending will help the economy revive.

9. Option D

There is a tendency for the public debt to grow during the recessions

10. Option C

The Congress takes 6 months to decide on the decision fo cutting of taxes to deal with the economic chnages. This should have been executed at the right time to not deal with the repurcussions which will be caused because of the delay in taking the decision.

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