Thank you for your help I would really appriciate it QUESTIO

Thank you for your help! I would really appriciate it.

QUESTION 11 A tax system that discourages savings hurts long-run growth prospects because: O the trade balance deteriorates investment spending decreases consumption spending remains constant. the federal budget turns into surplus. QUESTION 12 Which of the following sequence of events would follow an open market purchase of bonds? ?? interest rate ? ? investment ? aggregate demand ? t real GDP O interest rate ? ? investment ? ? aggregate demand ? ? real GDP ? interest rate ? ? investment ? t aggregate demand t real GDP t interest ratetinvestment aggregate demandreal GDP QUESTION 13 Political scientists and economists argue that truly autonomous central banks that are subject to minimal political influence are more likely to be: O more credible in their fight against inflation. O more credible in their attempts in reviving a troubled economy. 0 less credible in their fight against inflation. less credible in their fight against unemployment.

Solution

a) Less saving will affect the investment in the long run. The answer is \"B\".

b) With a purchase of bonds, the money supply will increase and the interest rate will fall. It will increase the investment and aggregate demand and with it the GDP. The answer is \"A\".

c) \"More credible in the fight against inflation\"

d) As the input cost is increasing there will be recession and inflation in the economy. we call the situation as stagflation.

e) \"Taxpayers pay taxes on both their wages and on the earning form their savings\"