Autonomous consumption = R100m Investment spending = R300m Government spending = R200 million Exports = R150 million Autonomous imports = R100 million Marginal propensity to consume =2/3 Tax rate = 1/10 Marginal propensity to import = 1/10 Yf = R2 150 million. Calculate the change in government spending required to reach full employment in the economy.

Autonomous consumption = R100m Investment spending = R300m Government spending = R200 million Exports = R150 million Autonomous imports = R100 million Marginal propensity to consume =2/3 Tax rate = 1/10 Marginal propensity to import = 1/10 Yf = R2 150 million. Calculate the change in government spending required to reach full employment in the economy.

MACROECONOMICS FOR TODAY

10th Edition

ISBN:9781337613057

Author:Tucker

Publisher:Tucker

Chapter11: Fiscal Policy

Section: Chapter Questions

Problem 5SQP

See similar textbooks

Similar questions

Suppose the marginal propensity to consume equals 0.8 (i.e., c1 = 0.8). Given this information, which of the following events will cause the largest increase in output? Select one or more: a. Public spending, G, increases by 200 b. real GDP was larger than nominal GDP from 2002 to 2008 Public spending, G, increases by 150 c. Investment, I, increases by 150 d. Taxes, T, decrease by 200
It is assumed that everything else stays constant. The economy has Consumption $90, Investment spending $100, Government expenditure on goods and services $80, Tax revenues $50, Exports $50, Imports $60. And marginal propensity to consume is assumed to be 0.7. When the potential output of the economy (or long run output) is $250, what should be government spending in order to close an output gap?
Marginal propensity to consume = 0.8; In an economy with tax rate = 0.25 and Marginal propensity to import = 0.10, how much would an increase of 250 units in autonomous spending increase the equilibrium income level?
Suppose that autonomous consumption (a) is 200, private investment spending (I) is 340, government spending (G) is 300 , Net taxes (T) are 300 and marginal propensity to consume (b) is 80 %, and marginal tax rate (t) is 25 % . By using the above information: a) Find the equilibrium value of national income (you can take the approximate value if necessary b) Find out the effects of an increase in government expenditure by100 c) Just find the new national income equilibrium level when marginal tax rate is increased to 30 % and marginal propensity to consume is increase to 0.9. (you can give the numerical value approximately
The potential GDP of the country is 380 billion euros, and the actual is 240. The marginal propensity to consume is 0.8. Determine the change in government expenditures to get to the equilibrium point:
Actual output is $2,000, potential output is $2,500, and the marginal propensity to consume (MPC) is 0.8. Which will return the economy to potential output? Increase taxes by $125. Increase government spending by $500. Decrease taxes by $125. Increase government spending by $125.
Assuming you are the Minister of Finance and Economic Planning for Nigeria, in charge of Fiscal Policy. The Research Director of the Ministry brought you the following data on Nigeria’s for the previous fiscal year, 2021. An examination of the data reveals that, during the fiscal year 2021, households in Nigeria saved 20% of their disposable income (Yd) and spent the rest on consumption. In addition, ₦5,000.00 was spent on Consumption expenditure (C), which is independent of income and Gross Private Investment (I) was ₦ 7,000.00. Total Government expenditure (G) which stood at ₦8,000.00 was supposed to be financed by a lump sum tax of ₦2,000.00 (independent of income) and a proportional tax rate of 25% of national income. Exports (X) stood at ₦2,500.00. In addition, the country’s import (M) during the previous fiscal year comprises of ₦1,000.00 which was independent of the country’s national income and 10% which was dependent of the country’s national income. Given these data on…