Q: nultiplier the multiplier emains the same. remains the same. lecreases. decreases. ncreases.…
A: A) OPTION C IS CORRECT
Q: Problem 1: Suppose the current price level is 105, and the current level of RGDP is $17.2 trillion.…
A: Since you have asked multiple questions, we will solve the first question for you. If you want any…
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Q: a. You are studying an economy with an income tax rate, t1, of 32% and an MPS of 0.3. It is…
A: Answer: Given: Income tax rate = 32% = 0.32 MPS (marginal propensity to save) = 0.3 MPC (marginal…
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A: Given: MPC=0.75 Autonomous consumption=$6000 Planned Investment=$2000 Planned government…
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A: ANSWER Planned Aggregate Expenditures
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A: Decreased: Investment=16% Consumer spending= 12.5% Exports=13%
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A:
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A: C= 100 + 0.75 Yd G= 100 T= 100 Y = 900 T'=200 G'=200
Q: QUESTION 20 Consider an economy that is producing an aggregate output of Y2 shown in the figure…
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A: Answer in Step 2
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A: Y=C+I C=50+0.75Y I=500
Q: a ssume HPC =0.80 and that taxes are at by64billion goverment purcha ses are increused b, $4billion…
A: here we calculate the Change in RGDP by the help of MPC using in the formula which are as follow-
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A: Increase in Govt. purchases or spending = $87 billion MPC = 0.89
Q: or I fall more?
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A: Here, we calculate the given as follow;
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Q: 60. Assume a recessionary gap of $300 B exists in the U.S. macroeconomy. Also assume that the MPC…
A: Recessionary gap occurs when actual output is less than potential output.
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A: Suppose the current equilibrium GDP is less than Potential GDP .
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Q: C = 600+ 0.8Yd, Yd=Y-T, Tg = 100, l= 200, R = 50, G = 350, X = 250 and M = 200+ 0.1Y. a. Calculate…
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A: Marginal propensity to consumer = Change in consumption / Change in the income MPS = 1-MPC…
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Potential GDP > Real GDP, so there is a recessionary gap which can be closed by increasing G or decreasing T.
Since balanced budget multiplier is 1,
Required increase in G = Required decrease in T = Recessionary gap
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- Explain the difference between the government purchases multiplier and the net tax multiplier. If the MPC falls, what happens to the tax multiplier?Only typed answer Explain why the multiplier falls when taxes depend on income. .1 Assume the following for the economy of a country: a. Consumption function: C = 60 + 0.75Yd b. Investment: I = 75 c. Government spending: G = 45 d. Net taxes: T = - 25 + 0.2Y e. Disposable income: Yd. = Y - T f. Equilibrium: Y = C + I + G Solve for equilibrium income. How much does the government collect in net taxes when the economy is in equilibrium? What is the government’s budget deficit or surplus?1. on basis of the following information. Assume that equilibrium real GDP is $800 billion, potential real GDP is $950 billion, the MPC is .80, and the MPI is .40. a) How much must taxes fall to eliminate the GDP gap? b) If government spending and taxes both change by the same amount, how much must they change to eliminate the recessionary gap? 2. Use the following equations for exercise C= $100 + .8Y I=$200 G= $250 X = $100 - .2Y a) What is the new equilibrium level of real GDP if government spending and taxes both increase by $150?
- 1. Suppose the MPC is .90 and the MPI is .10. if government expenditure goes up $100 billion while taxes fall $10 billion, what happen to the equilibrium level of real GDP? Use following equations for exercise 2-4 C= $100 + .8Y I=$200 G= $250 X = $100 - .2Y 2. What is the equilibrium level of real GDP? 3. What is the new equilibrium level of real GDP if government spending increases by $150? 4. What is the new equilibrium level of real GDP if government spending and taxes both increase by $150? 5. Make a graph showing the spending and tax revenue of your state government for as many years as you can find (use the government of your home country if you are not from the United States). What trends do you notice? What spending categories make up the largest share of the state budget? What are the largest sources of revenue?Consider the following economy: C = 300 + 0.8 (Y – T) I = $300 G = $200 and T = $250 What is the equilibrium level of national income? What is the change in national income, if only government spending increases by $10? What is the government spending multiplier? What is the change in national income, if only taxes increase by $10? What is the tax multiplier? Based on (b) and (c), does the balanced budget multiplier theorem hold? What is the change in national income, if both government spending and taxes increase by $10 each?Y C I G X $ 100 $ 120 $ 20 $ 30 $ 10 $ 300 $ 300 $ 20 $ 30 - $ 10 $ 500 $ 480 $ 20 $ 30 - $ 30 $ 700 $ 660 $ 20 $ 30 - $ 50 14.If government spending increases by $ 15, what is the new equilibrium level of the real GDP? If government spending increases by $ 15 then to find the new equilibrium I can use the recessionary GAP formula Recessionary GAP = GDP Gap / Spending Multiplier (5) 15 = GDP Gap (5) 5 75 = GDP Gap GDP Gap + Old equilibrium level of the real GDP =…
- 1. Calculate GDP loss if equilibrium level of GDP is $8,000, unemployment rate 8.8%, and the MPC is 0.80. Hint: (Use Okun's law to calculate GDP loss) a) How much money should the government spend to eliminate this GDP loss? b) Calculate the tax cut needed to eliminate this GDP loss. 2. Calculate MPC, MPS and the Multiplier if consumption expenditure increases by $4,000 as a result of increase in income from $40,000 to $46,000. 3. Assume that initially G is $300 and equilibrium real GDP is $5000. If the multiplier is 5, what would be the new equilibrium level of GDP if Government expenditures increase to $500. This would be all the questions and work to these questions. There's nothing more to it.1. Calculate GDP loss if equilibrium level of GDP is $8,000, unemployment rate 8.8%, and the MPC is 0.80. Hint: (Use Okun's law to calculate GDP loss) a) How much money should the government spend to eliminate this GDP loss? b) Calculate the tax cut needed to eliminate this GDP loss. 2. Calculate MPC, MPS and the Multiplier if consumption expenditure increases by $4,000 as a result of increase in income from $40,000 to $46,000. 3. Assume that initially G is $300 and equilibrium real GDP is $5000. If the multiplier is 5, what would be the new equilibrium level of GDP if Government expenditures increase to $500.For questions #9, 10, 11, and 12 use the following equation. C = 20 + 0.2(Y – T) 9) What is the marginal propensity to save for this economy? a) 2% b) 20% c) 60% d) 80% ( plz show the equation and how you use the numbers from the equation to solve it)10) What is the tax multiplier for this economy? a) -0.25 b) 0.25 c) -1.25 d) 1.25 11) If the government increases taxes by 20, then how much will consumption change by? a) -5 b) 5 c) -25 d) 25 12) To increase real GDP by 40 the government needs to change government spending by a) 48 b) 40 c) 32 d) 20
- Hi there . can you please assist on the folloiwng question below. Use the following information on economy X to answer the questions below.Consumption function: C = 250 + 0.8YInvestment spending: I = 150Government spending: G = 500Exports of goods and services: X = 200Imports of goods and services: Z = 150Proportional tax rate: t =25%Full employment level of income = 3575 Q..1.1 Calculate total autonomus spending for economy X. Q..1.2 Calculate the multiplier for economy X. Q.1.3 Calculate the equilibrium income for the economy. Q.1.4 Calculate the change in government spending required to reachfull employment level of income.1. Suppose that the economy can be described by the following equations: C = 400 + (8/9)*DI I = 300G = 800T = (1/2)*Y (X – M) = 0. a. If national income (Y) increased by $1, by how much would consumption increase? What is the name of this concept?b. Find the equilibrium level of output.c. The budget for this fiscal year increases government spending by $50. i) Sketch the effect of the increase in government spending.ii) Calculate the new equilibrium level of income.iii) Calculate the change in income and compare to the increase in government spending. Comment.iv) Given your numerical answer in part (iii), calculate the change in national income when government spending increases by one dollar.v) Derive the actual value of the fiscal multiplier using an algebraic equation. Compare to part (iv).Now G assumes its original value of G = 800.d. Congress decreases the tax rate from (1/2) to (1/4) i) Sketch the effect of the decrease in the tax rate. ii) Calculate the new equilibrium level of…
