Loading...

Messages

Proposals

Stuck in your homework and missing deadline? Get urgent help in $10/Page with 24 hours deadline

Get Urgent Writing Help In Your Essays, Assignments, Homeworks, Dissertation, Thesis Or Coursework & Achieve A+ Grades.

Privacy Guaranteed - 100% Plagiarism Free Writing - Free Turnitin Report - Professional And Experienced Writers - 24/7 Online Support

Explain how built in stabilizers work

29/11/2021 Client: muhammad11 Deadline: 2 Day

3. Explain how built-in (or automatic) stabilizers work. What are the differences between proportional, progressive, and regressive tax systems as they relate to an economy’s built-in stability?

Built in stabilizers increase the government’s budget deficit during a recession and increases its budget surplus during inflation without requiring explicit action by policymakers. When an economy is growing and GDP is rising, tax receipts are high because of the progressive tax system. Personal income tax, corporate tax, sales taxes and all types of taxes decline during recession. This is an automatic tax cut that helps in time of recession. If households still had to pay the same level of taxes during the recession, the economic fluctuation would be so much worse, that type is proportional tax. The last type is regressive, this is when the average tax rate decreases as the taxpayer’s income increases and increases as the taxpayer’s as the taxpayer’s income decreases.

4. Briefly state and evaluate the problem of time lags in enacting and applying fiscal policy. How might “politics” complicate fiscal policy? How might expectations of a near-term policy reversal weaken fiscal policy based on changes in tax rates? What is the crowdingout effect and why might it be relevant to fiscal policy?

A time lag refers to the time it takes for a policy to take effect- the time between a policy measure is announced and its effects are visible. When this lag is large the government may not make a sound decision. It may take a decision that yields quicker results which it can show off to voters and get back into power. This decision maybe suboptimal for the economy, but optimal for the political party. Expectations about future policy reversals keeping politics in mind can dent the effect of any announced policy. if it is expected that tax rates will be lowered in future due to political considerations of winning an election, then a current policy of higher tax rates is not effective, making the fiscal policy weak.

Crowding out refers to the dampening of the effect of a rise in government expenditures on GDP. G rises to raise GDP, but the simultaneous rise in interest rates cause a fall in investment. The later reduces GDP. The overall effect of a rise in G is therefore dampened/ muted as it gets crowded out by rising interest rates.

7. Why did the budget surpluses in 2000 and 2001 give way to a series of budget deficits beginning in 2002? Why did those deficits increase substantially beginning in 2008?

The budget surplus story was due to the stock bubble, not tax cuts and budget restraint. Bubbles are not sustainable, by definition. The stock bubble began to burst in 2000. By the summer of 2002 stocks had fallen to roughly half of their peak values destroying $10 trillion in wealth. This gave us a recession which, although officially short and mild, led to the longest period without net job creation since the Great Depression (until the current downturn). The ending of this bubble was the biggest factor turning the surplus into a deficit. Also previous administration tax cuts were very much secondary in this picture, as were wars and the Medicare drug plan. The end of the stock bubble was the end of the budget surpluses.

8. Distinguish between the total U.S. debt and the debt held by the public? Why is the debt as percentage of GDP more relevant than the total debt? Contrast the effects of paying off an internally held debt and paying off an externally held debt.

The total U.S. debt represents the total amount of money the Federal government owes to the owners of government securities. However, only a portion of that (58 percent in 2004) is held by the public; the remaining 42 percent is held by the Federal government – the government owes the money to itself. Debt as a percentage of GDP is more relevant because it is a better measure of an economy’s, or government’s ability to manage that debt. It is analogous to an individual household: the level of mortgage and other debt is only a problem if the household does not have sufficient income (GDP) to keep up with monthly payments. A $10,000 debt is a problem for someone with no income; it is not a significant burden on someone earning $100,000 per year. Paying off internally held debt is like the left hand paying the right hand; dollars are redistributed, but there is no domestic loss of wealth. Paying off externally held debt represents an outflow of wealth from the country. Note that this isn’t necessarily bad if the external debt was incurred to bring in goods or assets that facilitate domestic economic growth or serve other important priorities.

Homework is Completed By:

Writer Writer Name Amount Client Comments & Rating
Instant Homework Helper

ONLINE

Instant Homework Helper

$36

She helped me in last minute in a very reasonable price. She is a lifesaver, I got A+ grade in my homework, I will surely hire her again for my next assignments, Thumbs Up!

Order & Get This Solution Within 3 Hours in $25/Page

Custom Original Solution And Get A+ Grades

  • 100% Plagiarism Free
  • Proper APA/MLA/Harvard Referencing
  • Delivery in 3 Hours After Placing Order
  • Free Turnitin Report
  • Unlimited Revisions
  • Privacy Guaranteed

Order & Get This Solution Within 6 Hours in $20/Page

Custom Original Solution And Get A+ Grades

  • 100% Plagiarism Free
  • Proper APA/MLA/Harvard Referencing
  • Delivery in 6 Hours After Placing Order
  • Free Turnitin Report
  • Unlimited Revisions
  • Privacy Guaranteed

Order & Get This Solution Within 12 Hours in $15/Page

Custom Original Solution And Get A+ Grades

  • 100% Plagiarism Free
  • Proper APA/MLA/Harvard Referencing
  • Delivery in 12 Hours After Placing Order
  • Free Turnitin Report
  • Unlimited Revisions
  • Privacy Guaranteed

6 writers have sent their proposals to do this homework:

Instant Assignment Writer
Math Guru
Isabella K.
Solutions Store
Math Exam Success
Maths Master
Writer Writer Name Offer Chat
Instant Assignment Writer

ONLINE

Instant Assignment Writer

After reading your project details, I feel myself as the best option for you to fulfill this project with 100 percent perfection.

$19 Chat With Writer
Math Guru

ONLINE

Math Guru

I am an experienced researcher here with master education. After reading your posting, I feel, you need an expert research writer to complete your project.Thank You

$45 Chat With Writer
Isabella K.

ONLINE

Isabella K.

I have written research reports, assignments, thesis, research proposals, and dissertations for different level students and on different subjects.

$19 Chat With Writer
Solutions Store

ONLINE

Solutions Store

As per my knowledge I can assist you in writing a perfect Planning, Marketing Research, Business Pitches, Business Proposals, Business Feasibility Reports and Content within your given deadline and budget.

$37 Chat With Writer
Math Exam Success

ONLINE

Math Exam Success

I have done dissertations, thesis, reports related to these topics, and I cover all the CHAPTERS accordingly and provide proper updates on the project.

$15 Chat With Writer
Maths Master

ONLINE

Maths Master

I will provide you with the well organized and well research papers from different primary and secondary sources will write the content that will support your points.

$41 Chat With Writer

Let our expert academic writers to help you in achieving a+ grades in your homework, assignment, quiz or exam.

Similar Homework Questions

Lancaster uni student portal - Life of pi chapters - Fraction to decimal flashcards - Dead white males play - Chaucer canterbury tales excerpt - Concert review - Post threshold standards examples of evidence - History of organisational behaviour pdf - Literature Review Paper - Manrose mf100t installation manual - Young and rubicam's 4 cs - Desegregation and Public Schools - Organization - How to cut masonite underlayhow to cut masonite underlay - D3 collapsible network graph - 1a farnham street parnell - Into thin air page count - Ode to tomatoes pablo neruda analysis - Qrb 501 week 2 quiz - 1 paragraph each Colleague - Cisco metro ethernet design and implementation guide - Gsm learn student portal - Gerber baby food international marketing - 54 kipling drive bateau bay - A baymouth bar is a manmade feature designed to control wave erosion. - Three historical examples of recessions affecting bargaining power - Scientific method m&m lab answers - 5 principles of display - What are methods of development - Science and music monash - A poison tree tone and mood - History 101 histrory of american civilization 1 - Iom future of nursing leading change advancing health - Ubc mental health clinic - Professional investment services pty ltd - Chemistry ice table practice problems - Selecciona la respuesta que mejor completa cada oración - Air pollution persuasive essay - Concrete gully surround screwfix - Banquo's reaction to the witches prophecies - SQL Database - Homework - En la charcutería se puede comprar desde jamón hasta chorizos (sausages). - African history paper fix - Phi2604 - Cyclohexene and cyclohexane experiment - Foster school of business cover letter - 11-15 mackay street kewdale wa 6105 - Entrepreneur magazine cover template - Business government and society a managerial perspective - VLSI - Norfolk recycling paint amnesty - Pico questions related to emergency nursing - Things not seen theme - 8week5ind - Usa''!love vashikaran specialist molvi ji+91-9829644411 - Avalanche facts national geographic - The over the shoulder shot involves - Who are disney's main competitors - Acidic basic and amphoteric oxides - Castillo tax service south sioux city - Title of the organization - How much is 225 ml of water - Tableau problem homework to be done in Tableau format - Debit and credit theory - Acid base titration neutralization reaction lab report - Mcq on naive bayes classifier - Elysee kirra holiday rental - How to clean sunbrella awning - Human relations strategies for success 6th edition pdf - Drayton rts room thermostat - Case study about communication in organization - Acetylation of aniline mechanism - Sphere of Influence - Aboriginal lesson plans year 3 - Debt collection australia upper class collections - Ancient days - Political engagement activity example - Cmi calc - Jotting observation early childhood examples - Nye social control theory greg doucette deadlift record - Exercise 10 4 straight line depreciation lo p1 - Post- Tania - Twisted pair schematic symbol - Kaufman test of educational achievement - Buy ben and jerry's stock - What pricing strategy does bentley motors use - CS week 4 discussion - Nmb ball bearing catalogue - Projectile motion hypothesis - Organ Donor - Purpose of the assessment (with ULO Mapping) - Mw petroleum corporation case solution - Codominance and incomplete dominance practice - Citizens united v fec answer key - Active learning template diagnostic procedure - Political parties and interest groups worksheet - Discrete probability distribution - Where are all the i's in wii sports resort - Descriptive rules of english