Question 1 Suppose MPC and the tax rate are both equal to 0.2 for a closed economy. Assuming no change in the price level, real GDP will increase by $ government increases spending on infrastructure by $20 million. Copyrighted Million if material - not to be shared. A Keep one decimal place in your answer, and do not include the $ sign, any spaces or commas. Previous Page Next Page Page 1 of 65

Question 1 Suppose MPC and the tax rate are both equal to 0.2 for a closed economy. Assuming no change in the price level, real GDP will increase by $ government increases spending on infrastructure by $20 million. Copyrighted Million if material - not to be shared. A Keep one decimal place in your answer, and do not include the $ sign, any spaces or commas. Previous Page Next Page Page 1 of 65

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter20: Exchange Rates And The Macroeconomy

Section: Chapter Questions

Problem 3TY

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Only typed answer and please don't use chatgpt Why will temporary tax increase be insignificant in reducing consumption expenditures by the amount expected a. Because viewed the tax increase as permanent. b. Because people choose to increase their savings. C become people viewed taco increases temporarily d. Consumption expenditure are not related to level of taxtation
Trace out the effect of increase in government expenditure on equilibrium output and the interest rate when government finance its expenditure through (a) open market operation, (b) increase in tax rate.
Question:Given that the marginal propensity to consume in a fully employed closed economy is 0.75, an increase in government expenditure of $1,000 million will increase the national income by:a. $0b. $750c. $4,000d. $7,500e. $8,000
I and T are fixed (I=Io and T=to), so we know that if households attempt to save more, cet. par., Private saving will rise and the government budget deficit (GBD) will fall. Private saving will fall and the GBD will rise. Private saving will not change, but the GBD will rise. none of the above Provide appropriate name(s) and explain using I=sum of Saving.
Assume a closed economy in which, there is no government. If ouput (income) is 800,autonomous consumption is 100, and marginal propensity to consume is 0.70 in this economy.Then calculate the the amount of consumption spending?
Suppose you are given the following data for a particular economy (unit: Millions of Euros):Gross National Income mp (GNImp) =1650Investment (I) = 220(Iliq) Net investment = 210Private consumption(C) =1100Net External Income (NEI) = 0Net Indirect Taxes (NIT) = 231Public Spending (G) = 363 Calculate: a) Balance of Goods and Services or Net Exports (NX) and Amortizations/Depreciations (A). b) Net National Product at Base Prices (NNPbp) and Net Domestic Product at Base Prices (NDPbp)
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.2.5 Calculate what the new equilibrium income should be if the government of thiscountry decides to cancel all taxes, implying the tax rate would now be 0%
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