macroeconomics

Question 3 1) Using fiscal policy; to increase real GDP and employment the government could ernment expenditure on goods and services or taxes " a Increase; Increase The bj Increase; decrease c) Decrease; Increase ) Decrease; decreess 21 Suppose that only revenue taken by the government is in the form of income tax, and the rate is 5 percent. If aggregate income is $800 billion, and government outlays are $100 billion then the government budget has " a) A deficit of $50 billion El Increase the money supply, decrease the interest rate bj Increase government expenditure; decrease taxes b] A surplus of $60 billion c) A deficit of $40 billion c) Decrease government expenditure, increase taxes d) A surplus of $40 billion d) Decrease the money supply; increase the interest rate 3] Refer to the below figure. What would be the effect of the fiscal policy used by the gov- 5) Refer to the below figure. Which fiscal policy should the government undertake to re- move the economic gap? * ernment on aggregate demand curve and short run aggregate supply curve? * Price Level The is here AD n Ch ON a) AD shifts right, SRAS shifts right =) Expansionary monetary policy bi AD shifts right, SRAS stays unchanged b) Contractionary monetary policy () AD shifts left, SAS shifts right c) Contractionary fiscal policy dj AD shifts left, SRAS stays unchanged d) Expansionary fiscal policy 41 Refer to the belowfigure. Which tools should the government use to move the economy from its current gap toward the potential GDP? *