seven quarters ago, in time period 1 on the graph, ruritania's economy emerged from a recession and experienced a period of growth. the economy is now heading back into recession. the ministry of economics is debating various fiscal policy measures, each of which has an expected lag time before becoming effective. if no action is taken, the business cycle would follow the path illustrated by the individual points on the graph. identify which of the policies are more likely to make ruritania's economic situation better or and which would make it worse. you are currently in a sorting module. turn off browse mode or quick nav, tab to items, space or enter to pick up, tab to move, space or enter to drop. better worse answer bank a tax cut that requires
Better Worse Real GDP trend Answer Bank 02 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Time (quarters) Answer Bank An increase in government spending that requires nine months to be approved by the Ruritanian Parliament and thereafter one year to be implemented and take effect. A tax cut that requires three months to be approved by the Ruritanian Parliament and thereafter six months to be implemented and take effect. A lengthy process of spending reforms designed to evaluate all areas of government is expected to take a year to complete. The Parliament will need another six months to approve the plan, which will result in spending cuts. A decrease in government spending coupled with an increase in taxes that require three months to be approved by the Ruritanian Parliament and thereafter three months to be implemented and take effect.
