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If an economy has a level of real
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- 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..........?Please answer the question below: If the current real GDP is P700 billion, which of the following policies would bring the economy to potential output? a. increase government spending by P25 billion b. increase government spending by P100 billion c. increase government spending by P20 billion d. decrease government spending by P100 billion 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 billion * the attached photo is just connected to the question *If investment and consumption expenditures fall and cause GDP to fall, what is an appropriate fiscal policy? increase monetary base growth and decrease interest rates increase taxes and decrease government expenditures decrease monetary base growth and increase interest rates decrease taxes and increase government expenditures
- Please consider the attached photo; that is connected to the question: If the current real GDP is P700 billion, which of the following policies would bring the economy to potential output? a. increase government spending by P25 billion b. increase government spending by P100 billion c. increase government spending by P20 billion d. decrease government spending by P100 billion. The tax multiplier is: a. -0.8 b. -1.25 c. -5 d. -4Which of the following is an appropriate fiscal policy response if the economy is in a state of rising inflation? Contractionary fiscal policy by decreasing government spending and taxes. Expansionary fiscal policy by increasing government spending and taxes. Contractionary fiscal policy by decreasing government spending and increasing taxes. Expansionary fiscal policy by increasing government spending and lowering taxes.Consumers increased consumption by a relatively small amount in 2008 and 2009 because they believed the tax cuts were temporary. True or False
- Calculate how much output would expand by if the government increased spending by $500 billion and financed this spending by increasing lump-sum taxes by the sameWhy does a $100 billion dollar increase in government spending increase output by more than $100 billion?Consider an economy that is operating below the full-employment level of real GDP. What would be the effect of an increase in government spending on aggregate demand and real GDP?
- It is assumed that everything else stays constant. The economy has Consumption $90, Investment spending $100, Government expenditure on goods and services $80, Tax revenues $50, Exports $50, Imports $60. And marginal propensity to consume is assumed to be 0.7. When the potential output of the economy (or long run output) is $250, what should be government spending in order to close an output gap?Which 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 ratesGiven that potential output is 3000 and equilibrium income solved previously, what is the change in G necessary to eliminate the output gap?
