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Which best describes the economic effect that results when the government increases interest rates and restricts the lending of money? Borrowing money becomes more expensive and there is less investment in production.Which best describes the economic effect that results from the government having a budget surplus? Overall demand decreases, reducing the incentive for producers to increase production.Which best describes the economic effect that results from the government running a budget deficit? Demand increases, pushing producers to increase supply.
Which of the following best describes the economic effect that results from the government having a budget surplus?
Which best describes the economic effect that results from the government having a budget surplus? Overall demand decreases, reducing the incentive for producers to increase production.
Which of the following best describes the economic effect that results from the government running a?
Which best describes the economic effect that results from the government running a budget deficit? Demand increases, pushing producers to increase supply.
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What happens when unemployment increases during a recession quizlet?
Terms in this set (10)
During a recession, the unemployment rate increases. There is a set amount of time between the growth and the trough of a business cycle.
Which is an example of a government policy that protects domestic producers against international competition quizlet?
Import tariffs protect domestic producers against foreign competitors. By lowering production costs, subsidies help foreign competitors gain export markets.
Which of the following best describes the economic effect that results from the government running a budget deficit?
Which best describes the economic effect that results from the government running a budget deficit? Demand increases, pushing producers to increase supply.
Which of the following best explains one of the benefits provided by economies of scale?
Which best explains one of the benefits provided by economies of scale? A larger customer base enables retailers to pay lower prices for wholesale goods.
What happens when government spending increases?
According to Keynesian economics, increased government spending raises aggregate demand and increases consumption, which leads to increased production and faster recovery from recessions.
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Which of the following best describes the economic effect that …
What is the economic effect that results from the government runninga budget deficit? Demand increases, pushing producers to increase supply.
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Which of the following BEST illustrates the involvement of the U.S. government in the marketplace today? answer choices. The government takes over an industry …
AGGREGATE DEMAND AND ECONOMIC FLUCTUATIONS
Which of the following best describes the meaning of aggregate expenditure in the traditional macro model (with no government and a closed economy)? a. The …
How does fiscal and monetary policy impact the economy?
Fiscal policy affects aggregate demand through changes in government spending and taxation. Those factors influence employment and household income, which then impact consumer spending and investment. Monetary policy impacts the money supply in an economy, which influences interest rates and the inflation rate.
What is the effect of fiscal policy on economic growth?
Fiscal policy can promote economic growth through both macroeconomic and microeconomic channels. At the macroeconomic level, sound and responsible fiscal policy can affect aggregate demand and stabilize the economic cycle, thus boosting business confidence, investment, and long-term growth.
What would be the impact of a rising unemployment rate?
High unemployment indicates the economy is operating below full capacity and is inefficient; this will lead to lower output and incomes. The unemployed are also unable to purchase as many goods, so will contribute to lower spending and lower output. A rise in unemployment can cause a negative multiplier effect.
Which best explains what happens when unemployment increases during a recession?
Which best explains what happens when unemployment increases during a recession? The recession worsens into a depression.
What happens to unemployment rate during a recession?
A recession begins, with a decline in total output, a rise in unemployment, and a drop in inflation. The recession hits its bottom, the unemployment rate rises to a maximum, and inflation is at a low point.
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Which of the following is an example of a government policy that protects domestic producers against international competition?
protectionism, policy of protecting domestic industries against foreign competition by means of tariffs, subsidies, import quotas, or other restrictions or handicaps placed on the imports of foreign competitors.
Which of the following is the most common political argument for government intervention in international trade?
Perhaps the most common political argument for government intervention is that it is necessary for protecting jobs and industries from unfair foreign competition. Competition is most often viewed as unfair when producers in an exporting country are subsidized in some way by their government.
Which of the following is the most common political argument for government intervention in international trade group of answer choices?
Government intervention in international trade can take the form of reducing restrictions on imports and encouraging foreign direct investment. Political arguments for government intervention are usually concerned with protecting consumer interests within the country.
Which explanation best explains the effects of inflation?
Which explanation best explains the effects of inflation? Consumers have more products to choose from. Inflation erodes (take away from) the purchasing power of the dollar.
How will the market for loanable funds be impacted and what will the effect be on the interest rate?
When the relative demand for loanable funds increases, the interest rate goes up. When the relative supply of loanable funds increases, the interest rate declines. The demand for loanable funds is downward-sloping and its supply is upward-sloping.
Which of the following comes after a period of recession in the business cycle?
Economic recovery is the business cycle stage following a recession that is characterized by a sustained period of improving business activity. Normally, during an economic recovery, gross domestic product (GDP) grows, incomes rise, and unemployment falls as the economy rebounds.
What does economies of scale mean quizlet?
Economies of scale means large organisations can often produce items at a lower unit cost than their smaller rivals – a source of competitive advantage. It is important not to confuse total cost with average cost. As a firm grows in size its total costs rise because it is necessary to use more resources.
What is the role of the government in economic development?
The government (1) provides the legal and social framework within which the economy operates, (2) maintains competition in the marketplace, (3) provides public goods and services, (4) redistributes income, (5) cor- rects for externalities, and (6) takes certain actions to stabilize the economy.
What are the benefits of economies of scale?
- 1) Reduction of the Cost. …
- 2) Higher Staff Salary. …
- 3) Pay More Returns to the Investors. …
- 4) Scale the Business Across More Geographies. …
- 5) Improve the Products. …
- 6) High Ability to Attract New Investment. …
- 1) Cost Increase After Specific Point in the Output.
What causes an increase in government spending?
The growth of government budgets can be broken down into a-institutional and institutional components. The former component — the familiar substitution, income, and population/public goods-tax sharing effects — is estimated to contribute about two-fifths of the growth of U.S. government spending.
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How does an increase in government spending affect interest rates?
If an increase in government spending and/or a decrease in tax revenues leads to a deficit that is financed by increased borrowing, then the borrowing can increase interest rates, leading to a reduction in private investment.
How does an increase in government spending increase aggregate demand?
The increased government spending may create a multiplier effect. If government spending causes the unemployed to gain jobs, then they will have more income to spend leading to a further increase in aggregate demand.
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