FISCAL POLICY – Assignments
Assignments for Macroeconomics Chapter 9
Assignment #1: Show graphically and explain how an increase in government spending affects NNP equilibrium level. Use the aggregate expenditure graph as well as the leakage-injection graph.
Assignment #2: Show graphically and explain how an increase in a (lump sum) tax affects NNP equilibrium level. Use both, aggregate expenditure and leakage-injection graphs.
Assignment #3: What is the overall effect of a simultaneous increase in tax collection and government spending? Show this effect with the help of both aggregate expenditure and leakage-injection graphs.
Assignment #4: In Keynesian view, what should be the fiscal policy over a business cycle? What elements increase and decrease its effectiveness?
Assignment #5: What is the impact of various government programs which make up the bulk of government spending and are referred to as nondiscretionary? Why is a full-employment budget calculated and what is its purpose?
Assignment #6: Discuss the problems and limitations of fical policy.