The following information is provided about an open economy with a government. Use the information to answer the questions that follow: C = 450 + 0.4Y I = 350 G = 150 X = 70 Z = 35 + 0.1Y T = 0.15Y Yf = 1550 Q.2.5 Calculate what the new equilibrium income should be if the government of this country decides to cancel all taxes, implying the tax rate would now be 0%

The following information is provided about an open economy with a government. Use the information to answer the questions that follow: C = 450 + 0.4Y I = 350 G = 150 X = 70 Z = 35 + 0.1Y T = 0.15Y Yf = 1550 Q.2.5 Calculate what the new equilibrium income should be if the government of this country decides to cancel all taxes, implying the tax rate would now be 0%

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter9: Classical Macroeconomics And The Self Regulating Economy

Section: Chapter Questions

Problem 5WNG

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The following information is provided about an open economy with a government. Use the information to answer the questions that follow:C = 450 + 0.4YI = 350G = 150X = 70Z = 35 + 0.1YT = 0.15YYf = 1550 Q1. Calculate what the new equilibrium income should be if the government of this country decides to cancel all taxes, implying the tax rate would now be 0% Q2. Before the government decreased the tax rate, how much of government spending was required to bring the economy to full employment?
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.2.4 Calculate the tax revenue to the government of this country when the economy remains in equilibrium.Q.2.5 Calculate what the new equilibrium income should be if the government of this country decides to cancel all taxes, implying the tax rate would now be 0%.Q.2.6 Before the government decreased the tax rate, how much of government spending was required to bring the economy to full employment?
For the goods market of an open economy to be in equilibrium, the interest rate must be at 2% when GDP equals 120. We also know the following about consumption (C), investment (1), fiscal policy (taxes T and government expenditures G), imports (M) and exports (X) of the country: C = 20 + b*Y_{D} I = 44 T = 60 G = 22 M = 16 X = 32 where b is the marginal propensity to consume and Yo is net disposable income. What is the value of total consumption? Select one: a. 18 b. 20 C. 38 d. 120
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.2.6 Before the government decreased the tax rate, how much of governmentspending was required to bring the economy to full employment?
Consider the following equations for a small open economy C = 2500 + 0.85Yd; T = 700 + 0.25Y; G = 8000; TR = 800; I = 4000 + 0.2Y; M = 3000 + 0.25Y; X = 2000 Use the reduced form equation to compute equilibrium national income. Compute the values of disposable income, consumption expenditure, tax revenue, and net exports. Using a measure, you are familiar with, demonstrate if the economy is operating a balanced budget.
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 = 1550Q.2.1 Calculate the level of autonomous spending in this economy. Q.2.2 Calculate the size of the multiplier(Note: Round your answer to two decimal places)Q.2.3 Calculate the equilibrium level of income(Hint: use the multiplier method) Q.2.4 Calculate the tax revenue to the government of this country when the economyremains in equilibrium.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%.Q.2.6 Before the government decreased the tax rate, how much of governmentspending was required to bring the economy to full employment?
The following question relates only to the equilibrium in the goods market IN A CLOSED ECONOMY and asks you to carry out a graphical analysis using both the Keynesian cross diagram together with the IS-MP diagram. >>) Suppose after the government has implemented the reduction in taxation that the central bank wants to keep the level of investment at the same level as before the tax reduction. How can the central bank intervene in the market to achieve this goal? Explain and illustrate graphically how the central bank can keep investment at the same level as before. Is there any additional impact of the central bank intervention on output, consumption and interest rates? If so what is the impact?
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The following information is provided about an open economy with a government. Use the information to answer the questions that follow:C = 450 + 0.4YI = 350G = 150X = 70Z = 35 + 0.1YT = 0.15YYf = 1550 Q1. Calculate the level of autonomous spending in this economy. Q2. Calculate the size of the multiplier(Note: Round your answer to two decimal places)
The following information is provided about an open economy with a government. Use the information to answer the questions that follow: C = 450 + 0.4Y I = 350 G = 150 X = 70 Z = 35 + 0.1Y T = 0.15Y Yf = 1550 Q.2.1 Calculate the level of autonomous spending in this economy. (2) Q.2.2 Calculate the size of the multiplier (Note: Round your answer to two decimal places) (4) Q.2.3 Calculate the equilibrium level of income (Hint: use the multiplier method) (2) Calculate the tax revenue to the government of this country when the economy remains in equilibrium. (2) Q.2.5 Calculate what the new equilibrium income should be if the government of this country decides to cancel all taxes, implying the tax rate would now be 0%. (6) Q.2.6 Before the government decreased the tax rate, how much of government spending was required to bring the economy to full employment?
In the Savings-Investment model, what is the effect of an increase in government spending on investment? Why?
What effect will each of the changes listed in Study Question 3 of Chapter 27 have on the equilibrium level of GDP in the private closed economy? Explain your answers.