Keynesian economists assert that a GDP gap = $6 trillion needs an increase in government spending of ... Group of answer choices 1. More than $6 trillion 2. Less than $6 trillion 3. $6 trillion
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- Suppose real GDP is $5,361 billion, taxes collected by the government are $528 billion, government spending is $669 billion, and consumption spending is $3,797 billion. If the economy is closed, what is the value of investment spending? Enter a whole number with no dollar sign and please do not include the word billion.Suppose the president is successful in passing a $5 billion tax increase. Assume that taxes are fixed, the economy is closed, and the marginal propensity to consume is 0.75. What happens to equilibrium GDP? There is a $20 billion increase in equilibrium GDP. There is a $20 billion decrease in equilibrium GDP. There is a $15 billion increase in equilibrium GDP. There is a $15 billion decrease in equilibrium GDP.Suppose MPC = 0.75. If the government increases spending by $100 billion, Workers get $100 billion in income, spend _______ billion.
- When comparing an increase in government spending on goods and services to an increase in private investment spending, in the short run Group of answer choices they will both shift aggregate supply. government spending will shift the aggregate demand and private investment the aggregate supply. government spending is inflationary; private investment is not. they will both shift aggregate demand.Suppose the government raised taxes by $100,000 and simultaneously raised spending by $100,000. If the marginal propensity to consume is 0.65, what is the net effect on Gross Domestic Product? (use a negative number if GDP would go down, and a positive number if GDP would go up) Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.Which of the following methods would best describe a deflationary fiscal policy? Select one: a) Taxes decrease Public spending increases b) Taxes increases Public spending decreases c) Taxes decrease Public spending constant d) Taxes decrease Public sending decreases e) Taxes incraese Public spending increases
- Discuss characteristics of an economy that helps itself correct from a recessionary gap.Suppose the president is successful in passing a $10 billion tax increase. Assume that taxes are fixed, the economy is closed, and the marginal propensity to consume is 0.8. What happens to equilibrium GDP? Group of answer choices There is a $50 billion increase in equilibrium GDP. There is a $40 billion decrease in equilibrium GDP. There is a $40 billion increase in equilibrium GDP. There is a $50 billion decrease in equilibrium GDP.Suppose that consumption is 70 million and disposable income is 350 and that the economy is experiencing a recessionary gap of 66 million. If the government spent 2 million and taxes were cut by 5 million, what happens to the GDP gap?
- Please answer the question: * the attached photo is for you to see that it is connected to the question * If current real GDP is P700 billion, which of the following policies would bring the economy to potential output? a. decrease taxes by P100 billion b. increase taxes by P100 billion c. decrease taxes by P25 billion d. increase taxes by P25 billionSuppose the interest on the debt was $700 billion. If interest is paid domestically, 90% will be spent domestically (the remainder is spent on foreign goods). If interest is paid to the foreign sector, only 10% is spent here (the remainder is spent in foreign countries). Every dollar collected in axes to pay the interest cause domestic spending to fall 90 cents. The spending multiplier is 2. d) What is the net impact on GDP if all interest is paid domestically?The simple aggregate expenditures model discussed in this chapter concluded The simple aggregate expenditures model discussed in this chapter concluded that one form of spending was just as good as any other; increases in all types of spending lead to equal increases in income. Is there any reason to suspect that private investment might be better for the economy than government spending? The simple aggregate expenditures model discussed in this chapter concluded
