Q: what will happen to the aggregate demand If government purchases increase by $100 billion, and the…
A: Aggregate demand (AD): - It is the total demand of goods and services in an economy at a particular…
Q: Using the following information: C = 300 + .60 Yd I= 200 a. Calculate equilibrium disposable income…
A: Since you have posted a question with multiple sub-parts, we will solve first three subparts for…
Q: Which of the following would be an expansionary fiscl policy? Placing a limit on government…
A: Fiscal policy refers to the use of government expenditure and tax policies to manipulate economic…
Q: What do economists mean when they say government purchases are “exhaustive” expenditures whereas…
A: Public expenditure refers to the expenditure that is incurred by the government in providing goods…
Q: Which part of the AS curve fiscal policy works better and why?
A: Aggregate supply refers to the total value of goods and services available for purchase at a…
Q: The average propensity to consume of a person is 0.6 and the marginal tax to consume is also 0.6.…
A: Average propensity to consume (APC) = 0.6 Average propensity to save (APS) = ?
Q: If autonomous spending increases:
A: Increase and decrease in autonomous spending leads to change in various things.
Q: Given: C= 400 + .6Yd. Taxes = 600…
A: Gross domestic product (Y0 is the total value of all final goods and services that produced with in…
Q: If the MPC is 0.5, the tax multiplier is Select one: a. -1 b. -2.5 C. -1.67 d. -2
A: Tax Multiplier:- The tax multiplier is a metric that evaluate how much a tax reform affects…
Q: How could fiscal policy alleviate the problem? What specific policy changes would be needed?
A: Everything involving public funding or taxes is referred to as fiscal. Fiscal policy refers to how…
Q: If the MPC is 0.9, then the tax multiplier is a. -0.1 b. -1.11 c. -9 d. -10
A: Keynesian economics is known as demand-side economics because according to Keynesians economics the…
Q: How does the increase in R&D tax credits affect the COC or MEI curve? Shift the MEI curve to the…
A: The cost of capital curve (COC) refers to the necessary return required by the firm to make the new…
Q: Under what conditions is expansionary fiscal policy the most effective at increasing output? Why?
A: Expansionary fiscal policy is the policy which is to be used to push back the equilibrium normal…
Q: Given the following information for a small open economy: C = R1 000 + 0,2Yd, The government…
A: An open economy is one wherein each domestic and global entities take part in product trade (items…
Q: According to computer estimates using a traditional macroeconomic model, the Obama administration…
A: At the point when the Obama organization came into office, the American economy was one…
Q: Which of the following is NOT a fiscal policy action? Group of answer choices decreasing government…
A: Fiscal policy is used by governments that have an economic influence. Changes in taxation and…
Q: explain the crowding out effect on consumption and investment
A: Answer: Introduction; Crowding out effect: when the government increases its spending the interest…
Q: With subsidies versus reduction output cuts, how will the curve shift from MPC to MSC ?
A: The production of various goods and services are affected by the subsidies as the subsidies which…
Q: Explain the difference between the government purchases multiplier and the net tax multiplier. If…
A: Investment multiplier refers to the number of time income increases due to increase in the…
Q: Determine whether the ad or as curve with shift with each scenarios below. Each situation is…
A: Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…
Q: reduces spending on highway construction by Ghc10 billion. • Which way does the aggregate-demand…
A: If the government reduces spending on highway construction there will be a decline in the aggregate…
Q: Using BC-IC framework, derive the demand curve.
A: Demand curve: The demand curve refers to the graphical representation of the price and quantity…
Q: Propose the Fiscal Policy needed to fix this economy.
A: A) Cost push inflation (Graph Type) In graph we can there is an increment in the price level because…
Q: Is supply-side policies have been successful in improving the performance of an economy regarding…
A: The theory that expanded demand drives economic growth is supply-side economics. Money, labor,…
Q: Explain the likely impact of spending on infrastructure on output in the long-run and show this on…
A: The infrastructure spending is considered as a part of Government spending which is a component of…
Q: By how much would the $90 billion 2008 tax rebates have shifted AD if the MPC was 0.95? billion
A: Answer : Tax rebate leads to increase in disposable income. Increase in disposable income leads to…
Q: Which of the following is NOT a fiscal policy action? Group of answer choices decreasing government…
A: The answer is - raising the quantity of money in circulation
Q: If the government were to implement one of the policies selected above, which curve will shift?…
A: The AD-AS model explains the relation between the price level and the quantity of real GDP.The AD is…
Q: Suppose economists observe that an increase in government spending of $10 billion raises the total…
A: Marginal Propensity to Consume (MPC) refers to the level of additional consumption expenditure due…
Q: Suppose the MPC in an economy is 0.95. What should the government do with taxes if they want to…
A: The magnitude of change in income due to change in autonomous spending is known as multiplier. The…
Q: T F Fiscal policy determines the level of interestrates.
A: Fiscal policy refers to the taxation and expenditure decisions of the government that influences a…
Q: What are the goals of supply side economics? Of the potential supply side tax cuts: income, saving,…
A: The theory of supply-side economics focuses on changing the supply of labour and products by…
Q: Tools ofmonetary policy and fiscal policy?
A: Monetary policy is the macroeconomic policy used by central bank in order to affect money supply and…
Q: C = 450 + 0.4Y I = 350 G = 150 X = 70 Z = 35 + 0.1Y T = 0.15Y Yf = 1550 Q.2.5 Calculate…
A: equilibrium in Keynesian model where the aggregate demand equal the aggregate income
Q: Calculate the government spending multiplier and the tax multiplier if the MPC is 0.6. Show your…
A: The government spending multiplier is calculated as follows.
Q: Which of the following is not an example of fiscal policy? Group of answer choices All of these…
A: The tool that government use in order to balance the economy is called fiscal policy tool.
Q: In the market for a good, the aggregate demand and supply are summarized by the following…
A: Given Aggregate demand Qd (p) = 20−p and supply Qs (p) = 2p−4 government charges a per-unit tax…
Q: Critically examine the doctrine of the Multiplier.
A: Multiplier: A multiplier extensively alludes to an economic factor that, when expanded or changed,…
Q: Use the following table to answer these questions: Y…
A: In the given table, the value of import is not given to calculate the marginal propensity to…
Q: What is macro stability and resource mobilization in fiscal policy?
A: In an economy, fiscal policy implies the action of the government to influence the aggregate demand…
Q: Suppose the MPC is 0.8. What is the tax multiplier in this economy? If the government were to lower…
A: Tax multiplier = - MPC / (1 - MPC) = - 0.8 / (1 - 0.8) = - 0.8 / 0.2 = - 4
Q: Discuss whether supply-side policies have been successful in improving the performance of an economy…
A: Supply- side policy:- These policies are attempts of government in order to enhance the productivity…
Q: Calculate the fiscal multiplier if the marginal propensity to save is 0.2.
A: Marginal Propensity to Save = 0.2 Fiscal Multiplier = -MPCMPSor Fiscal multiplier = -MPC1 - MPC
Q: Define the term multiplier effect (accelerator principle)?
A: There is some connection between the two. However, it is critical to recognise that they are…
Q: Life expectancy begins to drift downwards worldwide as a result of climate change accompanied by the…
A: The model that depicts the allocation of gross domestic product among the four spending components…
Step by step
Solved in 2 steps
- Given: C= 400 + .6Yd. Taxes = 600 Equilibrium Output = 4,000 At equilibrium, what is the sum of investment and government purchases in this economy?The macroeconomic effects of federal investment can increase if : a. State and local governments complement federal policy by taxing the federal investment. b. State and local governments accept the federal investment. c. State and local governments offset federal policy by reducing investment. d. State and local governments complement federal policy by also increasing investment.Could the expansionary fiscal policy adopted by the U.S. government lead to economic recovery from the Covid-19 shutdown?
- Why do we refer to fiscal policy as "Resource Mobilization Policy"?The following information is provided about an open economy with a government. Use theinformation to answer the questions that follow:C = 450 + 0.4YI = 350G = 150X = 70Z = 35 + 0.1YT = 0.15YYf = 1550 Q.2.4 Calculate the tax revenue to the government of this country when the economy remains in equilibrium.Q.2.5 Calculate what the new equilibrium income should be if the government of this country decides to cancel all taxes, implying the tax rate would now be 0%.Q.2.6 Before the government decreased the tax rate, how much of government spending was required to bring the economy to full employment?Q8. Provide a brief explanation for autonomous and induced expenditures.
- Economists refer to the result in the IS-MPR diagram as “crowding out.”What gets crowded out and why?Below graph these are 5 questions. Where equilibrium will shift to A or to B if : There is a rise in public sector borrowing There is a rise in government government subsidies to the motor industry The government spends less on defence The basic rate of income tax is raised The VAT rate is cut from 20% to 15%.explain the crowding out effect on consumption and investment
