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How does an Expansionary Fiscal Policy affect the Real GDP of an Economy?

Expansionary fiscal policy is usually financed by increased government borrowing – and selling bonds to the private sector.Keynes advocated expansionary fiscal policy should be used during a recession – when...
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Answered by Ben J. • Economics tutor
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What is a monopoly?

A monopoly is a market structure where there is one single dominant firm (opposite to perfect competition). Since they dominate the market they are able to set the price because there are no close substitute...
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Answered by Zuzanna S. • Economics tutor
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How might an increase in average income levels affect the average price level?

According to Keynesian theory, the aggregate demand of the economy consists of consumption + investment + government spending + net exports (exports less imports). This takes into account all transactions in...
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Answered by Alice A. • Economics tutor
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How would you explain, in your own words, the concept of "Decreasing Returns to Scale"?

This is a phenomenon that occurs when input (labour, raw materials or capital) is added to a production process and yields a less than proportional increase in outputAs an example, we could look at a company...
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Answered by Laura A. • Economics tutor
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Explain the possible negative externalities that might arise from the increased use of cars (10 marks)

Negative externalities are caused either by the consumption or the production of a good or service. The use of cars results in the creation a negative externality of consumption, which is defined as an exter...
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Answered by Joseph W. • Economics tutor
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