What happens to the real GDP if the government increases spending by $50 million and the government multiplier is 1.5?

Q: When the MPC increases: a. the government spending multiplier stays the same b. the government…

A: The marginal propensity to consume refers to that portion of the increased income that was spent by…

Q: what will happen to the aggregate demand If government purchases increase by $100 billion, and the…

A: Aggregate demand (AD): - It is the total demand of goods and services in an economy at a particular…

Q: By how much will GDP change

A: Government spending multiplier formula  ∆Y/∆G = 1/1-MPC ∆Y = 1/1-MPC × ∆G ∆Y = 1/1-0.80 × 10  ∆Y =…

Q: use the following equation. C = 50 + 0.6(Y – T) 9) What is autonomous consumption in this economy?…

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

Q: Why is a $100 billion increase in government spending on goods and services more expansionary than a…

A: According to the aggregate expenditure model Total income (Y) = Consumption (c +b(Y-Taxes) +…

Q: You are given data on the following variables in an economy:     Item Value Government spending…

A: G = 300 I = 200 NX = 50 Autonomous taxes = 250 t = 0.1 MPC = 0.5 C = 600 when Y = 1500 Now, solving…

Q: Why is the tax multiplier smaller than the government spending multiplier?

A: Spending & taxation are the two main instruments of fiscal policy. The government can either…

Q: factors affecting the increasing purchase of goods and services

A: 1. Population -- more population more government expenditure on goods and services like health,…

Q: Suppose the government decide to use fiscal policy to close the output gap. The marginal propensity…

A: here we calculate the change of government spending require to close the GDP output , by using the…

Q: 4. If the Government Spending Multiplier is 3, the value of the Tax Multiplier is 5. If taxes…

A: The Government Spending multiplier is the change in equilibrium income due to one unit change in…

Q: Please show a diagram showing fiscal stimulus impacting on an economy where household saving is on…

A: Fiscal stimulus is defined as the fiscal policy measures taken by the government to boost the…

Q: Use the following equations for exercises 16–18. C = $100 + .8Y I - $200 G = $250 x = $100 – .2Y 16.…

A: The gross domestic product (GDP) is the standard measure of value-added produced during a certain…

Q: Explain the difference between the government purchases multiplier and the net tax multiplier. If…

A: Investment multiplier refers to the number of time income increases due to increase in the…

Q: Which of the following sentences correctly describes the budget of the Federal Government of the…

A: The budget deficit states that the government's expenditure surpasses the government's revenue. The…

Q: If the government spends 10 million and the multiplier is 5, then real GDP will increase by: Group…

A: If the government spending = 10 million Multiplier = 5 Then government spending multiplier is…

Q: If the multiplier is 4 and a change in government spending leads to a cumulative $500 million…

A: The multiplier can be defined as the number which denotes the proportionate increase in income due…

Q: Refer to columns 1 and 6 in the table below. a. Incorporate government into the table (in the…

A: Answer: (a). Aggregate expenditures, Private open economy, Billions Government expenditures,…

Q: Say the MPC is .6 and suppose taxes are cut by $300 billion and government spending is increased by…

A: we can calculate the change in government spending by using the multiplier formula as follow-

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

A: Fiscal policy is initiated by the government of the country.

Q: What does an increase in the income tax rate​ illustrate? An increase in the income tax rate is an…

A: What does an increase in the income tax rate​ illustrate? In general, [income] tax rate increases…

Q: Explain how MPC and the multiplier effect would impact a government’s attempt to stimulate its…

A: The government in the fiscal policy either increase government purchases spending or decreases the…

Q: How relevant is the multiplier concept to the implementation of expansionary and contractionary…

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

Q: Use the following equations for exercises 16-18. C = $100 + .8Y I = $200 G= $250 X = $100 – .2Y 16.…

A: Note: Since you have asked only 16-18 questions, we will solve that question for you. If you want…

Q: In order to boost the economy, the government should implement expansionary fiscal policy by…

A: Fiscal policy is the tool used by government to achieve the objectives of economy such as economic…

Q: Graphically illustrate the effect of an increase in government purchases. Explain the government…

A: The government purchases are the expenses that are done on the goods and services by all the…

Q: Calculate the government spending multiplier and the tax multiplier if the MPC is 0.6. Show your…

A: The government spending multiplier is calculated as follows.

Q: Use the following equations for exercises                                                     C = $…

A: C = $ 100 + .8 Y  I = $ 200  G = $ 250  X = $100 - .2 Y b=MPC = 0.8 GDP = C+ I + G + X GDP (Y)= 100…

Q: Government spending in the u.s federal budget that congress can adjust as it wishes is called ?

A: Major portion of the federal budget goes towards mandatory programs of social security, medicare and…

Q: Use the following information on economy X to answer the questions below.  Consumption function: C…

A: Given: Consumption function (C) = 350 + 0.6Y Investment spending (I) = 250 Government spending (G) =…

Q: What is fiscal multiplier?

A: Formula for fiscal Multiplier is Fiscal Multiplier=11-MPC where MPC is marginal propensity to…

Q: Government spending in the federal budget that Congress can adjust as it wishes is called

A: The power assigned to Congress to adjust the government spending in the federal budget is termed as…

Q: Government spending in Robok is $140 billion, and its only tax is an income tax with a marginal tax…

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

Q: Why does a $100 billion dollar increase in government spending increase output by more than $100…

A: The multiplier indicates that the number of times income increases by increasing government…

Q: How does an increase in tax influence the size of the multiplier

A: We know, Ad is given by, AD= C+ b(y-T)+I+G

Q: True or False? Explain: The multiplier effect is likely to be greatest when the government spending…

A: The multiplier effect is likely to be greatest when the government spending is targeted at the…

Q: If MPC = 0.5, a simultaneous increase in both taxes and government spending of $20 will a. decrease…

A: The pending multiplier denotes the ratio of change in the real GDP to the change in the initial…

Q: For the U.S. government, which of the given is NOT an example of discretionary spending? defense…

A: Answer is Medicare. Medicare spending is not an example of discretionary spending and it does not…

Q: If a $100 billion increase in government spending results in a $500 billion increase in real GDP,…

A: Answer to the question is as follows :

Q: Calculate the fiscal multiplier if the marginal propensity to save is 0.2.

A: Marginal Propensity to Save = 0.2 Fiscal Multiplier = -MPCMPSor Fiscal multiplier = -MPC1 - MPC

Q: Use the following equations for exercises 16-18. C= $100 + .8Y I = $200 G = $250 X = $100 – .2Y 16.…

A: The GDP or the gross domestic product can be defined as the measurement of the final value of all…

Q: C = 450 + 0.4Y I = 350 G = 150 X = 70 Z = 35 + 0.1Y T = 0.15Y Yf = 1550 (Hint: use the multiplier…

A: Gross domestic product (GDP) refers to the total value of all the finished goods produced within the…