Microeconomics (MindTap Course List)
10th Edition
ISBN: 9781285859484
Author: William Boyes, Michael Melvin
Publisher: Cengage Learning
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Question
Chapter 4, Problem 8E
To determine
If household and government can spend more than their earnings then what is the difference between these two? The ratio of government spending to
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How do budget surpluses and budget deficits affect the consumption and investment components of GDP
Assume the following to answer the following question:
C= 1000+ .9 (Y-T)
Tax rate = 0.1Y
Imports = 0.1(Y-T)
Government spending = 200
Investment = 300
Exports = 600
Potential Output = $8000
What is the current GDP in this economy?
Consider the following hypothetical data for the U.S. economy in 2018 (all amounts are in trillions of dollars; see pages 179–182).Consumption 11.0 Indirect business taxes .8 Depreciation 1.3 Government spending 3.8 Imports 2.7 Gross private domestic investment 4.0 Exports 2.5e. Based on the data, what is GDP? NDP? NI?f. Suppose that in 2019, exports fall to $2.3 trillion, imports rise to $2.85 trillion, and gross private domestic investment falls to $3.25 trillion. What will GDP be in 2019, assuming that other values do not change between 2018 and 2019?
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Microeconomics (MindTap Course List)
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- Use data below to answer the following questions:Consumption expenditures $300 billion, Government purchases $50 billionTaxes $40 billion, Investment $80 billion, Social Security payments $20 billionImports $30 billion, Exports $40 billiona) How much is GDP?b) How much are net exports?c) Social Security payments are government expenses. Should they be included in GDP? Explain.arrow_forward1. If imports are $2 trillion, exports are $1.9 trillion, consumption is $3.8 trillion, investment is $700 billion, and government spending is $1.1 trillion, how much is GDP? 2. If consumption is $2.5 trillion, investment is $900 billion, government spending is $700 billion, imports are $1.2 trillion and exports are $1.4 trillion, how much is GDP? Example: If GDP rises from $6 trillion in 1994 to $8 trillion in 1999 and the GDP deflator in 1999 is 110, find real GDP in 1999 and find the percentage increase in real GDP between 1994 and 1999. First, we are asked to find real GDP in 1999. To do this we divide the nominal GDP, which is $8 trillion ($8,000 billion), by the GDP deflator for 1999, which is 110. This then is multiplied by 100. Real GDP in 1999 is $7,273 billion or $7.2 trillion. To find the percent change you must find the difference of real GDP between 1999 and 1994. Change in GDP = 7,232 – 6,000 = 1,232 You then take this difference and divide it by GDP in…arrow_forward1. If imports are $2 trillion, exports are $1.9 trillion, consumption is $3.8 trillion, investment is $700 billion, and government spending is $1.1 trillion, how much is GDP? 2. If consumption is $2.5 trillion, investment is $900 billion, government spending is $700 billion, imports are $1.2 trillion and exports are $1.4 trillion, how much is GDP?arrow_forward
- Need asap please... If the U.S. government wanted to, it could just say that everyone who is unemployed is “employed in the job search” and receiving a paycheck for this “work,” and the government could claim that these government employees are producing “job search services.” Recall that in the official definition of GDP, government purchases(G), do not include transfer payments like unemployment checks and Social Security. -- Would this change in the definition of GDP increase GDP? Would it improve well-being?arrow_forwardWhat is the relative importance of consumption spending (C) in aggreagte demand and some factors that affect it? What is the relative importance of investment spending (I) in aggreagte demand and some factors that affect it? What is the relative importance of government spending (G) in aggreagte demand and some factors that affect it? What is the relative importance of Net Export (NX) (Net Export = spending on exports (X) - imports (M)) in aggreagte demand and some factors that affect it?arrow_forward1. Answer the following: A) In 2011 the United States economy had a GDP of $14,991 billion according to the United Nations. If consumption was $10,729 billion, government spending was $2,594 billion, and net exports was -$568 billion, how much was investment spending? B) In 2011 the United States economy had a GDI (Gross Domestic Income) of approximately $13,548 billion according to the Bureau of Economic Analysis. If wages were $8,340 billion, interest payments were $516 billion, and rent was $430 billion, approximately how much was remaining for profit?arrow_forward
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