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arlik [135]
3 years ago
12

An economy is operating at an output level below potential real GDP. If the government wishes to use fiscal policy to bring the

economy back to its potential real GDP, it will: increase the money supply. increase its spending. increase taxation. decrease the money supply.
Business
1 answer:
Ganezh [65]3 years ago
7 0

Answer:

The answer is B. increase its spending.

Explanation:

Fiscal policy is a tool used by the government of every nation to control its economy. It uses its spending and revenue (tax) to control it.

When the economy is operating at an output level below potential real GDP, it means there are low activities in the economy i.e reduced households' consumption, reduced business investments and reduced government spending.

Government can stimulate the economy (which will increase real GDP) by increasing its spending in all areas.

Increasing taxes will reduce GDP because households' consumption will reduce due to lower disposable income and business investments too will reduce.

Option A and D are wrong because money supply is a monetary policy.

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If the Fed lowers the federal funds​ rate, eventually the A. AD curve shifts​ rightward, increasing real GDP and raising the pri
GenaCL600 [577]

Answer:

A. AD curve shifts​ rightward, increasing real GDP and raising the price level.

Explanation:

Federal funds rate can be defined as the interest rates bank charge other banks on loans of reserves and it is a monetary policy instrument.

If the Fed lowers the federal funds rate, eventually the Aggregate Demand (AD) curve shifts rightward, increasing real Gross Domestic Products (GDP) and raising the price level.

However, raising the federal funds rate, eventually causes the

Aggregate Demand (AD) curve to shift leftward and real Gross Domestic Products (GDP) decreases.

8 0
4 years ago
Many state governments claim a shortage of funds because there are​ unmet needs. this claim is
adelina 88 [10]
It is false that many state governments claim a shortage of funds because there are unmet needs. It is false because of scarcity. Scarcity is a result from unlimited wants coupled with limited resources. 
5 0
3 years ago
In good years, dailey industries often loans cash to other companies, but in difficult years, they have to borrow cash from othe
MrRissso [65]

Any sort of funds used In financing a firm is recorded in the Financing activities while the loans cash will be recorded in the Financing activities of the statement of cash flows as well.

<h3>What is the Financing activities of cash flows?</h3>

This part of cash flows record the financing activities such as raising money through lending or issuing a bond as well as paying back to the investors.

Therefore, both transactions will be recorded in the financing activities of cash flows.

Read more about financing activities

<em>brainly.com/question/14441404</em>

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4 0
2 years ago
The principal represents an amount of money deposited in a savings account subject to compound interest at the given rate. Princ
kap26 [50]

Answer:

After 4 years the amount of money in the account will be $10,704.8

The interest earned is $1,204.8

Explanation:

To calculate future value on a certain amount (principal), with compound interest, the formula below is used:

FV = PV × (1+\frac{r}{n}) ^{n*t}

where:

FV = Future value

PV = present value = principal = $9,500

r = interest rate in decimal = 3% = 0.03

n = compounding period per year = quarterly = 3 times per year

t = time in years = 4 years

∴ FV = 9,500 × (1+\frac{3}{0.03}) ^{3*4}

FV = 9,500 × 1.001^{12}

FV = $10,704.8 (to 1 decimal place)

interest earned = future value - Present value

= 10,704.8 - 9,500 = $1,204.8

4 0
3 years ago
If the long-run average total cost curve for a firm is horizontal in a relevant range of production, then it indicates that ther
sweet-ann [11.9K]

If the long-run average total cost curve for a firm is horizontal in a relevant range of production, then it indicates that there (B) are constant returns to scale.

<h3>What is the long-run average total cost curve?</h3>
  • The long-run average cost (LRAC) curve depicts the firm's lowest cost per unit at each output level, assuming that all production parameters are changeable.
  • The LRAC curve presupposes that the firm has determined the best factor mix for creating any amount of production, as discussed in the previous section.
  • To derive the long-run total cost function, we take the expansion path's total cost and quantity pairs.
  • "When all factors of production are variable, the long-run total cost function displays the lowest total cost of generating each amount."
  • If a firm's long-run average total cost curve is horizontal in a relevant production range, it shows that there are consistent returns to scale.

As the description states, if a firm's long-run average total cost curve is horizontal in a relevant production range, it shows that there are consistent returns to scale.

Therefore, if the long-run average total cost curve for a firm is horizontal in a relevant range of production, then it indicates that there (B) are constant returns to scale.

Know more about the long-run average total cost curve here:

brainly.com/question/10205972

#SPJ4

Complete question:

If the long-run average total cost curve for a firm is horizontal in a relevant range of production, then it indicates that there

A. isn't a minimum efficiency scale.

B. are constant returns to scale.

C. are diseconomies of scale.

D. are economies of scale.

5 0
2 years ago
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