If the potential output for an economy is $100 billion and the current output is $98 billion, then the output gap for the country is_____. (fill in the blank
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If the potential output for an economy is $100 billion and the current output is $98 billion, then the output gap for the country is_____.
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- If potential GDP for the first quarter of 2013 = $75.8 billion, and real GDP for the first quarter of 2013 = $80.3 billion, then the output gap was..........?Suppose that there’s a recessionary gap, and the country wishes to produce its potential output. Which of the following policy initiatives might help it reach this goal? A.the government increases taxes on consumers and corporations. B.the government initiates policies that encourage private investment spending. C.the government cuts spending programs. D.the government initiates policies that discourage private investment spending.The recent Trump tax cuts are projected to increase the national debt by $24.5 trillion over the next 20 years. This will be financed through future taxes. Americans' future standard of living will increase if Question 14 options: the current account goes into surplus the government increases expenditures net exports rise substantially the tax cuts produce a large increase in current and future GDP
- Assume that GDP is $6,000, personal disposable income is $5,100, and the government budget deficit is $200. Consumption is $3,800, and the trade deficit is $100. a. How large is saving ( S )? b. How large is investment ( I )? c. How large is government spending ( G )?Using the following data, determine: National Income (GDP) 1,275 billion Marginal propensity to consume, b 0.9 Proportional rate of taxes 0.35 Autonomous expenditure 45 billion Exports 400 billion Marginal propensity to import, MPIm 0.23 Part 1: Level of Canadian imports, M? Part 2: Level of Canadian net exports, NX? Part 3: Is the trade balance in: (answer 1 for Surplus or 2 for Deficit )In a closed economy, suppose fiscal policy adds $500 bln in new government spending to GDP. Will the net effect on GDP be equal to, less than, or greater than $500? On what does your answer depend? In an open economy, is that same $500 bln rise in government spending going to have the same effect, all else equal, as in a closed economy? Why or why not?
- An increase in the budget deficit is the result of: A) Expansionary monetary policy; B) Contractionary monetary policy; C) Expansionary fiscal policy; D) Contractionary fiscal policy. Company tax is a: (a) Progressive, direct tax; (b) Progressive, indirect tax; (c) Proportional direct tax; (d) Regressive indirect tax. In the base year, a country produced 50 units of output at a price of R6,00 each for a nominal GDP of R300. This year it produces 60 units of output at a price of R8,00 each. What is the percentage change in real GDP since the base year? (a) 5%; (b) 10%; (c) 20%; (d) 15%.The country of Meditor, a small country with a closed economy, uses the merit as its currency. Recent national income statistics showed that it had GDP of $600 million merits, no government transfer payments, taxes of $150 million merits, a budget surplusof $40 million merits, and investment of $100 million merits. What was its consumption and government expenditures on goods and services? Please show you calculationHow could a greater budget deficit increase the trade deficit? What happens to the multiplier if there is an increase in the marginal propensity to consume? What would likely happen to the level of economic activity if the government took the necessary steps to reduce the deficit significantly in a relatively short period of time? When is the most appropriate time to reduce the deficit?
- Q5. Officially, a recession is considered to be: (Pick one answer) A. Six months of increasing inflation B. Two quarters of decreased output C. Six quarters of decreased output Q7. When current output is less than potential output, the economy must have which of the following? (Pick one answer) A. Trade deficit B. Rise in inflationary expectations C. Increasing wages D. Cyclical unemploymentIf the government is running a budget surplus, net export is 0. Then: i) private saving is greater than investment ii) private saving and investment are unrelated iii) private saving is less than investment iv) private saving and investment are equal v) private saving is zeroFor the goods market of an open economy to be in equilibrium, the interest rate must be at 2% when GDP equals 120. We also know the following about consumption (C), investment (1), fiscal policy (taxes T and government expenditures G), imports (M) and exports (X) of the country: C = 20 + b*Y_{D} I = 44 T = 60 G = 22 M = 16 X = 32 where b is the marginal propensity to consume and Yo is net disposable income. What is the value of total consumption? Select one: a. 18 b. 20 C. 38 d. 120