2. A. Using symbols and explaining their meaning, distinguish between: (1) the domestic demand for goods; and (2) the demand for domestic goods for an open economy. B.Explain why the demand for domestic goods curve (ZZ) has a different slope than the domestic demand for goods curve (DD). C. Using fully labeled ZZ/Y and NX/Y figures, illustrate graphically and EXPLAIN INTUITIVELY (i.e., by economic relationships) what effect, if any, an increase in taxes has on output, exports, imports, and net exports.

2. A. Using symbols and explaining their meaning, distinguish between: (1) the domestic demand for goods; and (2) the demand for domestic goods for an open economy. B.Explain why the demand for domestic goods curve (ZZ) has a different slope than the domestic demand for goods curve (DD). C. Using fully labeled ZZ/Y and NX/Y figures, illustrate graphically and EXPLAIN INTUITIVELY (i.e., by economic relationships) what effect, if any, an increase in taxes has on output, exports, imports, and net exports.

MACROECONOMICS FOR TODAY

10th Edition

ISBN:9781337613057

Author:Tucker

Publisher:Tucker

Chapter18: International Trade And Finance

Section: Chapter Questions

Problem 6SQP

See similar textbooks

Similar questions

Hi, could you help me solve this problem? Desired demand is DD = C +Ip +G+NX, where consumption C = a+b(Y −T), Ip is planned investment, G government consumption and T net taxes. Y denotes domestic output. Net exports are NX = cY f − dY , where Y f is foreign output (output of export countries). Parameters a, b, c, and d are all strictly positive and b > d. In equilibrium, Y = DD. By how many units (e.g. billions of euros) does domestic equilibrium output increase if go- vernment consumption is increased by 1 one unit? (Hint: solve for equilibrium Y as a function of G.) How and why does international trade affect the fiscal multiplier?
10. Which of the following is FALSE? A) Tariffs are a relatively easy tax to administer and often form an important part of revenue for low-income countries.B) Taxes on income, sales, and property require more complex accounting systems than do tariffs. C) Low-income countries often have large informal markets with the sales of many goods and services not being recorded, which makes it difficult to apply many kinds of taxes.D) Tariffs are not an attractive tax option for most low-income countries, so they mostly rely on quota licenses for revenue. i will rate. so answer correctly please
11. As per the Stolper-Samuelson analysis, in an open economy, the factor used extensively in the economic sector with an increasing price:(a) benefits as a producer, but loses more as a consumer.(b) benefits, regardless of the usual consumption preferences.(c) certainly benefits as a consumer.(d) loses both as a producer and as a consumer.
Q53 Many people argue that the imposition of tariffs in industry X will increase factor incomes in that industry and therefore be good for the country as a whole. The counter-argument is that... a. Factor incomes would first rise and then decrease in industry X. b. The increase in industry X factor incomes would be more than offset by reductions in real incomes to all other domestic residents. c. The increase in factor incomes in industry X would reduce profits to business owners by an equal amount. d. Factor incomes overall would increase, but wages in industry X would fall, which would hurt workers in that industry. e. The increase in factor incomes would increase unemployment.
1. Given the above diagram , assume that Sd and Dd refer to the domestic supply and demand of a given product and Pc refers to the global price of that product. In a situation based on free trade, the price and quantity of the said product would be: Pc and v. Pa and z. Pt and y. Pc and z.
Consider the imaginary small country of Kootenay. Assume that Kootenay is closed to trade, so that its net exports are equal to zero. Suppose that the economy is described by the following consumption function, where C is consumption, Y is income (real GDP), IP is planned investment, G is government purchases, and T is taxes: C = $40 billion+0.5×(Y – T) Suppose G=$115 billion, IP=$50 billion, and T=$10 billion. Given the consumption function and the fact that, in a closed economy, planned expenditure can be calculated as Y=C+IP+G, the equilibrium income level is billion. Suppose that government purchases are increased by $100 billion. The new equilibrium level of income will be equal to billion. Based on the effect of the change in government purchases on equilibrium income, you can tell that this economy's multiplier is equal to
Consider a small country that is closed to trade, so its net exports are equal to zero. The following equations describe the economy of this country in billions of dollars, where C is consumption, DI is disposable income, I is investment, and G is government purchases: C� = = 30+0.8×DI30+0.8×DI G� = = 5050 I� = = 6060 Initially, this economy had a lump sum tax. Suppose net taxes were $50 billion, so that disposable income was equal to Y – 50, where Y is real GDP. In this case, this economy's aggregate output demanded was ___________ . Suppose the government decides to increase spending by $10 billion without raising taxes. Because the spending multiplier is ____________ , this will increase the economy's aggregate output demanded by ____________ . Now suppose that the government switches to a proportional tax on income of 10%. Because consumers retain the remaining 90% of their income, disposable income is now equal to 0.90Y. In this case, the economy's aggregate output…
Suppose the domestic shoe demand and supply equations in a small open economy are: P = 168-4?D P = 24+2?S On the other hand, the shoe demand and supply equations of the large open economy are: Let's assume: P = 360- 6?D P = 40 + 2?S A) Suppose the large country imposes a customs tax of $ 12 per unit of good on top of the free trade price, and the smaller country drops it below $ 4. For the Large country of customs tax application in the light of above information What would happen to these: 1- In the welfare of the consumer. 2- In the welfare of the manufacturer.
1) https://openstax.org/books/principles-macroeconomics-2e/pages/20-1-absolute-and-comparative-advantage 2) https://openstax.org/books/principles-macroeconomics-2e/pages/20-2-what-happens-when-a-country-has-an-absolute-advantage-in-all-goods 3) https://openstax.org/books/principles-macroeconomics-2e/pages/20-4-the-benefits-of-reducing-barriers-to-international-trade please I need a short summary of these articles
You are given the following information about an open economy with government activity. Consumption C = 5 + 0.8Y. Imports M = 2.5 + 0.1Y. The only tax is a uniform income tax at a rate of 25 percent. Investment I, Government G, and exports X are autonomous. The initial level of National Income Y is 100, and trade is initially balanced. a) Find the values of I and G. b) Find the change in National Income Y if the autonomous part of imports increases to 5. c) Calculate the trade balance resulting from b above. d) Find the new tax rate which would be necessary to restore trade balance
explain briefly 2 significant aspects of the domestic economy and one significant aspect of international economy. analyse the extent to which the aspects of the economy affects insurance business.
Referring to the table below, fill in the missing data for the country of Birchwood. Expenditures Incomes Consumption 410 Compensation of employees 510 Gross investment 135 Gross operating surplus Government spending 215 Gross mixed income 90 Net exports 110 Taxes less subsidies on production 50 Indirect taxes (net of subsidies) 60 Gross domestic product at market prices Gross domestic income at market prices Less depreciation 40 Less depreciation 40 Less indirect taxes (net of subsidies) 60 Less indirect taxes (net of subsidies) 60 Net domestic product at basic prices Net domestic income at basic prices +/− Net foreign factor income −45 +/− Net foreign factor income −45 Net national product at basic prices (Net) national income Add transfer payments 130 Less undistributed profit 30 Less corporate profit tax 40 Less other income items 30 Personal income Answer