100% GE, Tue 10:53 PM Q. Safar Ed View History Bookmarks Develop Window Help Mic
ID: 1196405 • Letter: 1
Question
100% GE, Tue 10:53 PM Q. Safar Ed View History Bookmarks Develop Window Help Michigan State University EC 202 Intro to Macroeconomics Fall15 MACOMBER: Ch. 19 C Reade www.saplinglearning.com biscms/mod/ibis/view.php?id 2113402 Wikipedi App Pop TBMReader Economics question I chegg.com Michig k Med State U ty EC 202 Attempts Score 2/9/2015 10:00 AM A 86.2/100 C 2/8/2015 09:16 PM Gradebook Assignment Information Pr Calculator Available From Not Set incorrect X incorrect X Incorrect x Incorrect X Incorrect X IIncorrect x Incorrect x Incorrect X 7 of 18 12/9/2015 10:00 AM Due Date: Map Points Possible 100 Grade Category: Graded 88 Classify the following statements as true or false Description: 85 he government pays for increases in spending by increasing taxes Homework (no period Policies: roportionately, then the interest rate will rise and cause private investors 98 to invest less True You can check your answers You can view solutions when you complete If there is an increase in imports and no accompanying change in either savings or investment, then government debt will increase up on any question False You can keep trying to answer each questi 11 you get it right or give up According to the Ricardian equivalence theory, an increase in the government budget deficit might increase private saving. You lose 5% of the points available to each in your question for each incorrect attempt ansWe same, then there must be an increase in the trade deficit O Textbook Government can increase research and development investment by spending money itself or through tax incentives. 85 O Help With This Topic True Web Help & Videos C Technical Support and Bug Reports O Previous Next Give Up & Vi Check Answ Solution Ext Hint 98Explanation / Answer
1. This statement is False. When the government increases its spending, it does not increases the taxes propotionately. This is because of the presence of the multiplier in the economy. The increase in taxes is less than the government spending.
2.This statement is False. If there is an increase in imports and no change in investment or saving then the there is a trade deficit. But it may be balanced through appreciation or depriciation of the currency. There won't be a necessary increase in government debt
3. This statment is False. According to ricardian equivalence ab increase in budget deficit of the government will cause a prediction of inflation and tax increases among the businesses and individuals. It will result in an increases in saving and decrease in private spending.
4.This statement is False. An increase in government spening without a change in saving and investment does not necessarily leads in a trade deficit. Trade deficit may still be balanced due to change in the exchange rate of the currency.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.