2) Explain the macroeconomic effects of a tax cut according to the Ricardian Equivalence proposition. Include in your answer the 1S-LM graph that shows the effects of this tax cut.
Q: Jane sells scones at the school tuck shop. She knows that if she raises the price of scones, she…
A: Meaning of Microeconomics: The term microeconomics refers to that situation under which the…
Q: Explanation it correctly and details Q)Suppose that economists observe than an increase in…
A: Crowding out is a situation when there is a reduction in private investment spending due to an…
Q: An articie in the Wal Street Journal in 2021 observed, "And, while bitcoin is referred to as a…
A: Since you have posted multiple questions, we will solve the first question for you. If you want any…
Q: Economics Question 9 Which of the following is not true about Lindahl pricing? O a. There is…
A: The Lindahl price is a hypothetical pricing for a little bit more of a good if someone offered her a…
Q: Mr. Jones borrowed P 200,000 in a bank and promise to pay at end of each year for 10 years,…
A:
Q: 6. Suppose that there are only two countries, the U.S. and Japan. If real interest rates rise in…
A: As per the guidelines answer is given to the first question i.e. Q6. Answer 6) "If real interest…
Q: Compare the alternatives shown below on the basis of a future worth analysis, using an interest rate…
A: Future value is the value of an ongoing asset at a future date in view of an expected rate of…
Q: Treasury bill with a par value of $5000 sold at $4,750. After six months the discount on this…
A: Introduction Treasuring bill are short term instruments. They are issued by government of any…
Q: Question 17 What is the marketspace? Use the editor to format your onswer
A: The market space in marketing is characterized as a virtual market place in the commercial world,…
Q: MC Qu. 16-35 (Algo) Refer to the given table... Total Product Employnent Product Price $ 5 12 5. 22…
A: Total Cost = Employment * Wage Total Revenue = Total product * Product price Profit = Total Revenue…
Q: 5. Problems and Applications Q9 A farmer grows wheat, which she sells to a miller for $70. The…
A: Value added method only considers the value of final goods and services. The value of intermediate…
Q: To produce x units of t-shirts costs C(x) = 7.50x + 1200. The revenue is R(x) = 16x. a) Find the…
A: At break even, total revenue is equals to total cost.
Q: he ollowing year anufactures and sells a single automotive product line: nit selling price nit…
A: Break even point (Units)= Fixed Costs ÷ (Revenue per Unit less Variable Cost per Unit). Fixed costs…
Q: Estimates for a project appear in the following table: Estimates optimist most likely pessimist…
A: In the fields of economics and finance, the worth of a projected income stream as of the date of…
Q: consider a Bertrand competition in which there are two firms producing a homogenous product. the…
A: A homogenous product is one that is difficult to differentiate from rival items from various…
Q: Heavy Motors is taking a look at a new product line that will take a few years to create. New lab…
A: Annual worth or AW is referred to as the easy way of understanding the annual amount, for instance,…
Q: The product was in regards to bread
A: When talking about economic rent, it refers to the additional benefits that a firm collects due to…
Q: The Lindahl equilibrium involves producing how many units of the public good? At what tax share?
A: Public goods are those goods that are nonrival and nonexcludable. Nonrival means one cannot consume…
Q: uppose that the typical consumer has a salary of $30,000 in 2017. His salary grows by 2% per year.…
A: Answer: option-D is correct He can always pay for his own consumption basket without…
Q: There are 100 sellers in the market for widgets: 40 people are willing to sell a widget at £10 or…
A: The supply curve is a realistic portrayal of the connection between's the expense of a good or…
Q: 1) Explain what factors cause shifts of the aggregate demand curve in the open economy model.
A: The amount of products and services demanded by all customers in a given economy over a given time…
Q: The construction of a beach-front resort has led to erosion of the seabed, destruction of corals and…
A: Efficiency is defined as the highest level of performance attained by employing the fewest inputs to…
Q: 3. What were 3 things that helped cause the Great Depression? Have to done anything to fix those…
A: The great depression was the economic downturn in the late 1920s and 1930s that remained for a…
Q: Which one of the following statements regarding wants, needs and demand is incorrect? O A.…
A: Wants are the desries which an individual wishes to be fulfilled but those are not necessary for…
Q: A company manufactures and sells x cellphones per week. The weekly price-demand and cost equations…
A: In part A, we are maximizing the total revenue of the firm and in part B we are maximizing the total…
Q: ugnt payment of P 120,000 cash and proposed to pay the balance in equal hly payments for 2 years,…
A: Car price = P650,000 Down payment = P120,000 Loan amount (PV) = 650,000-120,000 = P530,000 Time = 2…
Q: Hospital has the following treatment options to reduce the incidence of Ventilator-Associated…
A: Rational Individual refers to the person that chooses or takes decisions depending on the situation,…
Q: True or False: When any firm charges a higher price, fewer of its goods are sold. a. True b. False
A: According to law if demand, there is inverse relationship between price and quantity demanded . But…
Q: nomics e Wall Street Journal in 2021 observed, "And, while bitcoin is referred to as a digital…
A: *Answer: Cryptocurrencies are digital or virtual currency backed by cryptographic methods that make…
Q: Assume the MPS is 0.25. Assuming only the multiplier effect matters, a decrease in government…
A: MPS=1-MPC Change in GDP=∆Y=11-MPC×∆government purchases=1MPS×∆government purchases In this…
Q: 60. Over the course of an economic expansion or boom we typically see GDP growth that is the…
A: GDP(gross domestic product) is the sum total of value of final goods/services produced in an economy…
Q: Figure 4-10 Price| S1 S2 M K D2 D1 Quantity Refer to Figure 4-10. The shift from S2 to S1 in the…
A: Meaning of Demand and Supply: The term demand refers to the willingness of an individual to…
Q: c. What does the Demographic Transition meam?
A: c) Demography refers to the concepts and methods used to examine human populations.
Q: Consider a market with four identical firms, each of which makes an identical product. The demand…
A:
Q: Norma buys and eats an apple everyday regardless of its price. Which of the following is true with…
A: Meaning of Microeconomics: The term microeconomics refers to that situation under which the…
Q: Suppose the demand for oil is P=122Q¯ 0.20. There are two oil producers who do not cooperate.…
A: * SOLUTION :-
Q: Which of the bank safety regulations enacted in the 1930s do you believe are most important in…
A: The bank is an institution that plays an important role between depositor and withdrawal. The…
Q: Changing the reserve requirement is such a powerful instrument of monetary policy that it is the…
A: 1. True - Reserve requirement is such a powerful instrument of monetary policy that it is the most…
Q: On a land worth P800,000, an investor constructs a building worth P3,000,000. The owner estimates…
A: Given, Land worth : P800,000Building worth : P3,000,000Receipts from Rentals : P720,000Maintenance…
Q: Economics If the Fed increases the money supply by 0.5%, will the value of money increase or…
A: The money supply is the supply of money that is controlled by the Federal Reserve of the country.…
Q: Give at least 2 examples on how a firm profit from global expansion
A: The term global business alludes to any business that happens across worldwide boundaries. At its…
Q: What problems will the federal reserve face if people are unemployed and facing inflation?
A: Inflation is defined as the rise in the average price level of commodities and services in the…
Q: The table below presents the tax revenue and spending for the government over five years.…
A: Formula to calculate Budget amount:- Budget Amount=TR-GS…
Q: Which of the following equations does not represent a plausible production function? a. F(K,L) =…
A: Production function, in the study of economics, helps in establishing a relation between maximum…
Q: People who live in countries with a greater number of cars per capita have a higher life expectancy.…
A: Before making any conclusions about the links between causes and effects, It need to ensure that it…
Q: 2. Why might sustainable development and ecotourism be preferable to development as it typically…
A: Ecotourism contributes to community development by offering a more sustainable alternative source of…
Q: Find the multiplier effect, when the consumer spends 0.6 and save 0.4 of every 1 SAR of extra income…
A: Information we have is that for every SAR of extra income the consumer spends 0.6 and saves 0.4
Q: Explain how and why the "invisible hand" works to ensure that producers provide quality services and…
A: here we explain how and why the “invisible hand” works to ensure that producers provide quality…
Q: How do changes in interest rate affect expected consumption? Interprete the effect of interest rate…
A: Precautionary Savings: This is a part of saving that is saved for consumption or use at a time of…
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
- please explain this question in words. Assume that fiscal policy can be accomplished by changing only one of G and T. In the IS-LM framework, suppose the effect on the general equilibrium output is the same between expansionary fiscal policy and expansionary monetary policy. Which one would you expect to have a greater impact on the equilibrium consumption?Expectation in Fiscal policy & Ricardian equivalence. One can argue that macroeconomics is essentially a story of a 'journey' from disequilibrium back to equilibrium. The recession caused by Covid that had forced many countries to use fiscal policy to compensate the shock and stimulate the economy is one example of disequilibrium. Cited from the Ministry of Finance website, the use of the government budget to mitigate the impact of the Covid crisis was clearly stated: "The state budget will continue to work hard to protect the community through Covid 19 handling from a health perspective, especially during the implementation of the Emergency Community Activity Restrictions (PPKM). This refocusing and sharpening of priorities is expected to help all communities in various sectors, especially the health sector, in dealing with Emergency PPKM." (MOF-RI News Index, 7/5/2021). Questions: a. Based on the macro workhorse model, explain the 'journey' (mechanism) how an initial disequilibrium…A. Assume that a hypothetical economy with an MPC of .75 is experiencing severe recession. By how much would government spending have to rise to shift the aggregate demand curve rightward by $70 billion? B. How large a tax cut would be needed to achieve the same increase in aggregate demand?
- b) What does the IS-LM-PC model imply about the MR effects of fiscal expansion? When is a fiscal expansion needed?The graph below depicts an economy where a decline in aggregate demand has caused a recession. Assume the government decides to conduct fiscal policy by changing taxes to reduce the burden of this recession. Fiscal Policy Price Level 140 130 120 110 100 90 80 70 60 50 LRAS $ AS AD₁ 40 0 80 160 240 320 400 480 560 640 720 800 Real GDP (billions of dollars) billion AD Instructions: Enter your answer as a whole number. If you are entering a negative number include a minus sign. a How much does aggregate demand need to change to restore the economy to its long-run equilibrium? $ b. If the MPC is 0.6, how much do taxes need to change to shift aggregate demand by the amount you found in part a? billion Suppose instead that the MPC is 0.92 c How much does aggregate demand and taxes need to change to restore the economy to its long-run equilibrium? Aggregate demand needs to change by S billion and taxes need to change by $[ billion.Assume that fiscal policy can be accomplished by changing only one of G and T. In the IS-LM framework, suppose the effect on the general equilibrium output is the same between expansionary fiscal policy and expansionary monetary policy. Which one would you expect to have a greater impact on the equilibrium consumption?
- hi, posting this again. will you let me know if these are correct? 18- tax cuts directed at higher income individuals will do more to stimulate the economy than those directed to lower income individuals, in the keynesian model.-true 19- growing federal budget deficits are a problem cased by kenynesian economics- false 20- Keynes advocated using government deficits in times of depression -trueConsider an economy suffering from recession (with its real GDP below the potential level). Using a basic (static) aggregate demand — aggregate supply (AD-AS) diagram explain how the fiscal policy may help boost the economy during a recession. Is the expansionary fiscal policy necessarily inflationary? Explain your answer using the AD-AS model. Use a suitable diagram to explain how an expansionary fiscal policy may affect the value of the Australian dollar against the Chinese yuan (assume no change in policies in China).Economics 1) Distinguish between discretionary and nondiscretionary fiscal policy. 2) Differentiate between expansionary and contractionary fiscal policy. 3) Plot the following markets on a graph: AD/AS graph: using 19.1 trillion for RGDP and 1.9% for inflation as point A (equilibrium). How will our AD/AS graph look like when U.S. government buys more military vessels (Shift the appropriate AD/AS curve on the graph)? 4) Plot the following markets on a graph: AD/AS graph: using 19.1 trillion for RGDP and 1.9% for inflation as point A (equilibrium). How will our AD/AS graph look like when Congress implements an income tax cut (Shift the appropriate AD/AS curve on the graph)?
- Assume that a hypothetical economy with an MPC of 0.9 is experiencing severe recession. a. By how much would government spending have to rise to shift the aggregate demand curve rightward by $40 billion? How large a tax cut would be needed to achieve the same increase in aggregate demand? b. Determine one possible combination of government spending increases and tax increases that would accomplish the same goal without changing the amount of outstanding debt. increase spend by increase tax byIn each of the following cases, either a recessionary or inflationary gap exists. Assume that the aggregate supply curve is horizontal, so that the change in real GDP arising from a shift of the aggregate demand curve equals the size of the shift of the curve. Calculate both the change in government purchases of goods and services and the change in government transfers necessary to close the gap. a. Real GDP equals $100 billion, potential output equals $160 billion, and the marginal propensity to consume is 0.75. b. Real GDP equals $250 billion, potential output equals $200 billion, and the marginal propensity to consume is 0.5. c. Real GDP equals $180 billion, potential output equals $100 billion, and the marginal propensity to consume is 0.8. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.Consider a simple Keynesian income-spending model of an economy described by the following equations 1. C= 250 + 0.75Yd TR = 200 T = 0.1Y 1=250 %3D G= 600 X = 350 %3D M=0.15Y (a) Calculate the equilibrium income level. (b) Sketch this equilibrium position using a two-dimensional graph. If potential GDP is 3,570 what is the size of the output gap? If public sector spending on goods and services is increased by 50, what is the new equilibrium level of income? How much should public spending have been increased by in order to have closed the output gap? (c) [All calculations to one decimal point. You must report your calculations.] MacBook Air 888 000 F1 F2 F3 F4 FS F7 F10 £ # @ € 2 $ % & 3 4 5 6 7 8 %3D Q E R Y A S F V alt cmd cmd V