Assume the following to answer the following questions: C= 1000+ .9 (Y-T) Tax rate = 0.1Y Imports = 0.1(Y-T) Government spending = 200 Investment = 300 Exports = 600 Potential Output = $8000 By how much must government spending increase or decrease to close this gap and bring the economy to Potential Output?
Assume the following to answer the following questions: C= 1000+ .9 (Y-T) Tax rate = 0.1Y Imports = 0.1(Y-T) Government spending = 200 Investment = 300 Exports = 600 Potential Output = $8000 By how much must government spending increase or decrease to close this gap and bring the economy to Potential Output?
Economics (MindTap Course List)
13th Edition
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Roger A. Arnold
Chapter18: Debates In Macroeconomics Over The Role And Effects Of Government
Section18.10: Demand-side And Supply Side Views Of The Economy And Government Tools For The Changing Real Gdp
Problem 3ST
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Assume the following to answer the following questions:
- C= 1000+ .9 (Y-T)
- Tax rate = 0.1Y
- Imports = 0.1(Y-T)
- Government spending = 200
- Investment = 300
- Exports = 600
- Potential Output = $8000
By how much must government spending increase or decrease to close this gap and bring the economy to Potential Output? Show your work
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