economics=------MACRO LEVEL?

Question

2) It is inflationary for gov't to increase spending if:
a) the economy is at full employment
b) aggregate supply curve is flat
c) equilibrium real gdp is well below full employment
d) it also cuts taxes

is the answer a

3) automatic stabilizers tend to stabilize the level of real gdp becausse:

1) the spending and tax multiplier are constant
2) federal expenditures and tax revenues change as the leve of real gdp changes
3) congress quickly changes spending and tax revenue
4) wages are controlled by the min wage law.

the answer b or c?

Answer 1

Part 1 I agree with you that the answer is a) because it would increase demand for labor when the supply can not increase, so would raise wages without increasing output.
Part 2 the answers is that federal expenditures and tax revenues change as the level of real GDP changes

Answer 2

the 2nd is unquestionably d. this is by using fact in a recession capital and perplexing artwork are actually not getting used effectively and hence GDP (output) falls. If the government spends greater, then this is spending it on some type of intake which would be contemplated in a GDP boost. the 1st question whether is plenty greater durable b/c i'm not somewhat beneficial what you attempt to declare. whether, i think that if the marginal fabricated from capital is .seventy 5 it potential that each and each unit of capital interprets to .seventy 5 instruments of output. this might reason a 50*.seventy 5 decrease in GDP, not 2 hundred.

Answer 3

The answer for the First one is definitely B. 100%, because you would only want to increase spending when its BELOW the FE

for the 2nd one, I'm pretty sure that the answer is B. not 100%, but very sure.