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- Potential GDP is at 500 trillion, actual GDP is at 375 Trillion. What is the gdp gap?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..........?How do you recommend the government change GDP and taxes to stabilize the economy in each of the following scenarios? Economic growth has started slowing and the unemployment rate has increased over the past four months. There has been strong growth in GDP over the past year, unemployment is very low, and inflation has started to rise. Prices are stable, unemployment is low and the economy is growing at an average rate.
- The Coronavirus Aid, Relief, and Economic Security Act (CARES) helped to Multiple Choice control the rising inflation due to the COVID recession. increase indirect payments to consumers using tax cuts. widen the GDP gap by increasing the government's debt. shrink the GDP gap that emerged due to the COVID recession.Do tax cuts increase economic growth and taxable income so much that tax revenue increases?The government of a country decides to double its current level of spending, causing real GDP to increase from $20,000 to $120, 000. What is the percent change in real GDP?
- Potential real GDP is equal to $10,000 and the current level of real GDP is equal to $9,000. What does the output gap equal (%)?Which of the following is NOT counted in the "G" component of spending a. social security payments to retirees b. the federal government purchases three new military fighter planes c. the city government pays the salaries of teachers d. the state government spends $100 million building a new section of highwayIn South Africa state-owned enterprises (SOE) and labour unions are currently putting pressure on government to finance their activities and to increase wages for civil servants. Discuss how politicians, bureaucrats and interest groups can contribute to the growth of government expenditure in the economy.
- An economy is described by the following equations: C = 1600 + 0.8(Y – T) I = 1000 G = 1800 T = 3000 + tY Where t denotes the marginal tax rate. Suppose potential GDP is Y* = 10,000. What marginal tax rate t would restore GDP to potential? a.0 b.0.1 c.0.2 d.0.3Which of the following is an appropriate fiscal policy response to a negative GDP gap? a. raise income tax rates b. increase government spending c. raise real interest rates d. lower real interest ratesSuppose real GDP is currently $12.5 trillion and potential real GDP is $13 trillion. If the president and Congress increased government purchases by $500 billion, what would be the result on the economy?
