Answer the questions below for the economy of Motak using the graph below.Government spending / net taxes400350300250200150100500The Economy of Motak200 400 600 800 1000 1200 1400 1600Real GDPNTRG1Tools/G₂O a. If GDP is $800 and government spending is G₁, the size of Motak's budget deficit is $b. If government spending is decreased by the size of the deficit in part (a), draw the new curve labelled G2 in the graphing areaabove.c. Suppose the multiplier has a value of 2, the new level of equilibrium GDP is $billion.d. Motak's deficit at this new level of equilibrium GDP is $billion.billion.

Government spending implies money spent by the public sector on the purchase of products and…

Answer the questions below for the economy of Motak using the graph below. Government spending / net taxes 400 350 300 250 200 150 100 50 0 The Economy of Motak 200 400 600 800 1000 1200 1400 1600 Real GDP NTR G1 Tools 1 G₂ O 0

Answer the questions below for the economy of Motak using the graph below. Government spending / net taxes 400 350 300 250 200 150 100 50 0 The Economy of Motak 200 400 600 800 1000 1200 1400 1600 Real GDP NTR G1 Tools 1 G₂ O 0

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Author:Tucker, Irvin B.

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Chapter17: Federal Deficits, Surpluses, And The National Debt

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Question

a. If GDP is $800 and government spending is G₁, the size of Motak's budget deficit is $
b. If government spending is decreased by the size of the deficit in part (a), draw the new curve labelled G2 in the graphing area
above.
c. Suppose the multiplier has a value of 2, the new level of equilibrium GDP is $
billion.
d. Motak's deficit at this new level of equilibrium GDP is $
billion.
billion.

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