ECON MACRO
5th Edition
ISBN: 9781337000529
Author: William A. McEachern
Publisher: Cengage Learning
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Question
Chapter 11, Problem 1.2P
To determine
The recessionary Gap and the fiscal policies that would close the gap with the help of a graph.
Concept Introduction:
Recessionary Gap: Recessionary Gap is the gap between actual output and potential output under full employment situation, when actual output is less than potential output.
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Topic: Fiscal Policy
1. A government collects $0.35 on every new dollar of income. Of the remaining $0.65 of disposable income, 20% is spent on imports, and 10% of the disposable income is saved.
a. What is the marginal propensity to withdraw?b. How much of each new dollar of income is spent on domestic consumption?c. What is the spending multiplier in this economy?
27-
: “The document showing the income and expenses of the state together is called X.” In his statement, which of the following is most appropriate for X?
a)
Budget
B)
national income
NS)
national income per capita
D)
Marginal revenue
TO)
purchasing power parity
9.
The lag associated with fiscal policy can:
magnify economic fluctuations.
stimulate output beyond full employment.
depress output below full employment.
all of the above.
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