Quèstion 13 T2 A B GDP Refer to the diagram. Discretionary fiscal policy designed to expand GDP is illustrated by O A. the shift of curve T1 to T2, O 8, a movement from d to b along curve T1. OC the shift of curve T2 lo T1 O D,a movement from a to c along curve T2. Government Purchases and Tax Revenues -----

Q: 2. Consider an economy where aggregate demand AD consists of aggregate con- 1000 and government =…

A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and…

Q: Solve for equilibrium where: • NT = tY = 0.15Y • C = Co + cYD = 20 +0.8YD o lo = 100 o Go = 100…

A: Firm's objective is to maximize the profit and produce where marginal revenue and marginal cost are…

Q: 2 Suppose that the government of Ansonia is experiencing a large budget deficit with fixed…

A: The marginal propensity to consume is the amount of change in consumption resulting from changes in…

Q: government spending and taxes both change by the same amount, how much must they chan

A: An inflationary gap, in economics, is the value by which the actual GDP exceeds potential…

Q: An economy has a consumption function of C = 20 + 0.75(YD), taxes = 10+0.2(Y), investment equal to…

A: Real GDP is the monetary value of all good and services produced in the economy which is being…

Q: Suppose that the MPS = 0.2 and the government is interested in raising the level of output in the…

A: As per the guidelines, we only question one question at a time. Please resubmit the other…

Q: 4. Explain the effect of a discretionary cut in taxes of $40 billion on the economy when the…

A: please find the answer below.

Q: 1) Suppose that the government spending multiplier is 1.7, and that the tax multiplier is -1.2. An…

A: Total change multiplier =sum of the multiplier of spending and taxes =1.7+(-1.2)=0.5 There is an…

Q: 34 64. If the marginal propensity to save (MPS) is small, O a. make the simple multiplier larger. O…

A: Multiplier =1/1-MPC or 1/MPS

Q: When the economy is in a recession, tax revenue while spending increases and, as a result, aggregate…

A: Recession is the economic phase where the production level is low and economic activities are…

Q: Assume that there are no crowding-out effects and the MPC for Canada is .8. By how much must the…

A: Given:MPC=0.8Now,Government spending multiplier=1(1-MPC)Government spending…

Q: Suppose that in a closed economy GDP is 11,000, consumption is 7,500, and taxes are 500. What value…

A: National income is the total value of products and services manufactured in the country during the…

Q: Say, the expenditure multiplier for an economy is 2. An increase in government spending by $300…

A: here we calculate how much economy boost due to government expenditure , so the calculation of the…

Q: iscal policy affects aggregate demand because:   government spending is a category of aggregate…

A: Fiscal policy involves the use of taxes, government spending, and transfer payments to promote…

Q: All things equal, an autonomous increase in the budget government purchases causes deficit function.…

A: Government spending is considered to be independent of the gross domestic product (GDP) level, which…

Q: Suppose a closed economy with no government spending which in equilibrium is producing an output and…

A: Tax multiplier: - it is a fraction that shows the magnitude of the change in national income due to…

Q: QUESTION 10 Assuming that the "equilibrium income" is $4,000 and the "full-employment" income is…

A: Government expenditure or expenditure includes all government consumption, investment and transfer…

Q: 4. Explain the effect of a discretionary cut in taxes of $40 billion on the economy when the…

A: A) Tax cut of $ 40 billion will increase disposable income and ultimately consumption. Propensity to…

Q: Calculate how much output would expand by if the government increased spending by $500 billion and…

A: It is given that, change in Government spending, i.e., dG=$500 billion and Change in lump-sum taxes,…

Q: Assume that the federal government is attempting to counter a negative shock through fiscal policy.…

A: The aggregate demand and aggregate supply in the economy determine the macroeconomic equilibrium.…

Q: Disposable income is equal to O A. national income minus government spending. O B. consumption…

A: Since you have posted multiple independent questions in the same request, we will solve the first…

Q: If taxes depend on income and the MPC is 0.8 and tis 0.4, the tax multiplier is Select one: O a.…

A: Given: The MPC is = 0.8 The tax T is = 0.4 To Find: The tax multiplier:

Q: A given change in taxes shifts the aggregate demand curve by than an equal change in government…

A: We know that the Government Spending Multiplier = 11- MPC and the Tax Multiplier = MPC1 - MPC

Q: 2. The economy is in a recession. A congresswoman suggests increasing spending to stimulate…

A: Option C is correct

Q: Which of the following is carried out in an expansionary fiscal policy? O a. Higher taxes and lower…

A: Expansionary fiscal policy is targeted at increasing aggregate demand, and is carried out by two…

Q: Assume that taxes depend on income and the MPC is 0.8 and tis 0.4. An increase in taxes of $10…

A: Calculate the tax multiplier as follows: Tax multiplier = -MPC/1-MpC +(MPC*t) =- 0.8/1-0.8+0.8*0.4 =…

Q: If the marginal propensity to consume is 0.8 and the government increases taxes by $1,000, the…

A: Answer (1)   Given Information   Marginal propensity to consume (MPC) is 0.8. And government…

Q: Which of the following statements are correct? (This is an "all-or-nothing" question: if you do not…

A: Gross domestic product(GDP) measures the money value of all final goods and services produced in an…

Q: 68. Consider the following consumption function C = 1100 + 0.6Yd What is the MPS? O a. 0.8 O b. 0.7…

A: Marginal propensity to save (MPS)  is the fraction of an increase in income that is not spent and…

Q: CI G (a) What is the current equilibrium level of national income? = 60+5+8+710:70 (b) What is the…

A: Note:- Since we can only answer up to three subparts, we'll answer first three. Please repost the…

Q: In an attempt to offset debt accumulated during the covid crisis, the Nigerian government passes…

A: Fiscal policy can be defined as the use of government expenditure and taxation to influence the…

Q: 3. a. Suppose that in a year when GDP is rising rapidly you also observe theGovernment budget…

A: The government balance is computed as follows: Government balance = Revenue - expenditure.

Q: Which of the following is correct? O 1) Expansionary fiscal policy during a recession means cutting…

A: Answer: In the case of expansionary fiscal policy, the government either cut tax rates or increase…

Q: 7). Spending promises made by govemments that are effectively a debt despite the fact that they are…

A: Hi! Thank you for the question As per the honor code, We’ll answer the first question since the…

Q: Suppose consumption function is specified as C $200 + 0.75Y planned investment is $600, net taxes…

A: Here we calculate the following terms by using the given information, so the calculation of the…

Q: government chooses to use fiscal policy to stabilize the economy and the marginal propensity to…

A: Given : Aggregate demand short of amount necessary=$100 billion If aggregate amount in turn shifted…

Q: ual to 100 and the aggregate consumption function is given by C = 250 + 0.75Y. And suppose that, if…

A: In macroeconomics, the total demand(DD) for final goods & services in an economy in a specific…

Q: Question 7 If the MPC in the economy is 0.75, govemment could shift the aggregate demand curve…

A: 7. Here, it is given that the MPC is 0.75. the value of MPC can be used to compute the spending…

Q: 2.2 Suppose that the government of Ansonia is experiencing a large budget deficit with fixed…

A: This is a problem of national income, that has been solved as follows:

Q: 16. Given the following Consumption Function as C = 350 + 0.75 (Y) ; and actual equilibrium real GDP…

A: The equilbrium in the economy occurs at the point where the aggregate expenditure is equal to the…

Q: 15. If government spending increases by 1 billion euro, and mpc=0.4, how much should tax change to…

A: In an economy, when government makes changes in its expenditure or spending, it will have a…

Q: Quèstion 16 If the MPC in the economy is 0.75, government could shift the aggregate demand curve…

A: If MPC is 0.75, the value of multiplier in an economy would be: =1/(1-MPC) =1/(1-0.75) =4

Q: III. Given: C= 50,000 + .8YDISP T=.25Y TR = 10,000 G= 20,000 I= 10,000 (Consumption Function) (Tax…

A: Following formulas are used to calculate the: 1) Level of transfer payments: Using the formula for…

Q: Still with the same data on Macroland, a closed economy with no government sector, and with fixed…

A: Yd = Y - T (T denotes Tax.) Y = Yd + T. GDP Yd Y = Yd + T C = Y - Iplanned Iplanned Iunplanned…

Q: If people expected that a fiscal policy in the form of a tax cut was temporary, then this policy's…

A: This policy would be weaker because it would be temporary.

Q: Refer to the Table. The government spending multiplier in this economy is Planned Output Net (Income…

A: Government Spending Multiplier = 11-MPC or 1MPS where MPC is the marginal propensity to consume MPS…

Q: Suppose that the MPC is 0.80 and there is an AD excess of $1,200 million. Which of the following is…

A: Since you have posted multiple question, we will solve the first question for you. If you want any…