In the long run, equilibrium output in the economy: Group of answer choices Will be less than potential output. Will exceed potential output. Will equal potential output. Will equal approximately 94 percent of potential output.
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In the long run, equilibrium output in the economy:
Will be less than potential output.
Will exceed potential output.
Will equal potential output.
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- 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?Disposable income - 200, 225, 250, 275, 300Consumption - 205, 225, 245, 265, 285 Refer to the above data. The marginal propensity to consume is;Disposable income - 200, 225, 250, 275, 300 Consumption - 205, 225, 245, 265, 285 Refer to the above data. The marginal propensity to consume is;
- 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:Increasing government purchases of goods and services would have a bigger multiplier effect on real GDP than decreasing taxes, dollar for dollar. Selected answer will be automatically saved. For keyboard navigation, press up/down arrow keys to select an answer. a b True FalseAs the aggregate price level in an economy rises, ____________________. Group of answer choices investment increases consumer demand increases exports decrease interest rates increase
- The economy is in a recession. The government enacts a policy to increase spending by $2 billion. The MPS is 0.25. What would be the full increase in real GDP from the change in government spending, assuming that the aggregate supply curve is horizontal across the range of GDP being considered? Multiple Choice $8 billion $2 billion $16 billion $4 billionComment, on the likely outcome with sufficient arguments? a) Impact on aggregate demand of the economy if imports are greater than exports.b) Impact on aggregate demand if the GDP of trading partner is increasing at a faster rate than that of India.c) Inflation rate in the country has reached 6.73%.The economy of a hypothetical country has been stable for two or three years with very low unemployment. Wages have been gradually increasing during this time. Now stock market prices begin significant increases, causing peoples’ investments, such as their retirement accounts and other investments, to increase in value. People feel very good about the future and use their new-found wealth to buy things that they had been hesitant to purchase in the past. Include detailed answers to the following questions: 1. What would be the likely impact on the government budget and national debt of the use of these fiscal policy tools (taxes, government expenditure, transfer payments, and interest rates)? 2. How would the use of these fiscal policy tools stabilize the economy?
- Which of the following would cause the aggregate supply curve to increase... Group of answer choices The government has reduced its spending by more than 10% over the last 2 years Throughout the economy, workers are using better equipment and output per hour is rising. Consumers are more confident and spending more than before. Energy prices such as gas and electricity have increased rapidly throughout the country.As part of the response to the Covid-19 virus, the Federal government passed a 2 Trillion-dollar bill. This increase in spending must result in which of the following? lower future taxes higher government spending some combination of lower future government spending and higher future taxes all available are true two of the available are trueRefer to Table 1. At an output level of $1,200 billion, there is an unplanned inventory change of Group of answer choices zero. positive $10 billion. negative $100 billion. positive $100 billion.