" Chrome File Edit View History Bookmarks Profiles Tab Window Help 7 46% Sat 6:20 pm Q DE ... Lesson summary: The costs x Google Dich X 02L Week 13 - BEA111 Introducti X BEA342 WS5 Q . Search in Document X + "+ Share ~ Share C A mylo.utas.edu.au/content/enforced/633936-AW_BBB_2451_34411_0_0_0_1_5/Week%2012/BEA111%2... ( GOAIO : E BEA342 WS5 1 / 2 100% + Styles Styles Pane ck for Updates Check for Updates or Update Activity: Classroom Experiment 12 1 13, 1, 14, 1, 15 1 16, 1 17, 1018 19 17 1.49 1 1.0 Write 'True' if the statement is correct and 'False' if the statement is incorrect. 1.20 130.8 The increase in revenue taxation received by the government during an economic boom is due to gs, the Age Pension and discretionary fiscal policy. Answer: (12 marks) Government purchases and transfer payments are included in the measure of government expenditures. Answer: e Average Weekly Earnings, the to December 2023 Contractionary fiscal policy' aims to reduce the rate of increase in aggregate demand. (12 marks) Answer: .6% An appropriate fiscal policy response when aggregate demand is growing at a faster rate than aggregate supply is to increase interest rates. Answer: th of Average Weekly Earnings, Suppose real GDP is $1.3 trillion, and potential GDP is $1.35 trillion. If the government increases he last 20 years. government purchases by $0.5 trillion, then the economy will be brought to equilibrium at potential (7 marks) GDP. Answer: ing an increase in purchasing utpacing the growth in Average gging behind both Average E + 138% + 1389 MAY 25 .. A@ Chrome File Edit View History Bookmarks Profiles Tab Window Help L] = a @ - &% Share ~ - Share Vo b & |- - Styles Styles 15 Pane e Qe @ Lesson summary: The cost: X \\ B Google Dich x \\ Week 13 - BEAT11 Introduc! X @ BEA342 WS5 X 4 v C & mylo.utas.edu.au/content/enforced/633936-AW_BBB_2451_34411.0_0_0_1_! B = BEA342WS5 [y 100% + ()] Check for Updates | or Update: 13 14 ,sl 1 7o A mi 17 i rb 130.8 Problem-Solving Questions 1. a What is fiscal policy, and how does it differ from monetary policy? b. Who is responsible for fiscal policy in Australia? gs, the Age Pension and During an 'economic boom', why is it likely that the Federal government budget will move into surplus? {12 marks) How could the existence of unemployment benefits or other transfer programs reduce the severity of an economic contraction? Explain why the 'tax multiplier\" is different from the government \"purchases multiplier'. e Average Weekly Earnings, the o December 2023. 5. Suppose that the current equilibrium GDP for a country is $12.3 trillion and that the potential GDP is $12.5 trillion. Will increasing government purchases by $200 billion or {12 marks) reducing taxes by $200 billion, restore the economy to potential GDP? Briefly explain why. Assume the government purchase multiplier is equal to 2 and a tax multiplier equal to 1.60. For each of these statements, identify if they are true or false and explain why. a. The increase in revenue taxation received by the government during an economic boom is due to discretionary fiscal policy. h of Average Weekly Earnings, e last 20 years. b. The legislative process which is required to implement fiscal policy often makes it easier to use than monetary policy. (7 marks) c. A law requiring the government to balance its budget in each year would work against : 'e stabilisers' ng an increase in purchasing automatic stabilisers'. tpacing the growth in Average . The government 'purchases multiplier\" always has a positive sign and the 'tax multiplier' always has a negative sign. gging behind both Average 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. + 138% & 138% @ Chrome File Edit View History Bookmarks Profiles Tab Window Help L= a @ - &% Share ~ - Share Vo b & |- - Styles Styles 15 Pane e Qe @ Lesson summary: The cost: X \\ B Google Dich x \\ Week 13 - BEAT11 Introduc! X @ BEA342 WS5 X 4 v C & mylo.utas.edu.au/content/enforced/633936-AW_BBB_2451_34411.0_0_0_1_! B BEA342 WS5 - - 100% + () Check for Updates | or Update: 13 14 ,sl 1 7o A mi 17 i rb 130.8 6. For each of these statements, identify if they are true or false and explain why. a. The increase in revenue taxation received by the government during an economic boom is due to discretionary fiscal policy. b. The legislative process which is required to implement fiscal policy often makes it easier to use than monetary policy. gs, the Age Pension and c. A law requiring the government to balance its budget in each year would work against 'automatic stabilisers\