If the MPS is 0.4 and gov taxes decrease by 50 thousand, what is the change...
Homework Answers
Answer : Multiplier =1/MPS =1/0.4 = 2.5
Change in GDP = Multiplier * Change in government spending =2.5*50,000 =1,25,000
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the MPS is 0.4 and gov taxes decrease by 50 thousand, what is the
change...
7. If the MPS is .25 and the current GDP is $180,000 and the target level...
7. If the MPS is .25 and the current GDP is $180,000 and the target level of GDP is $160,000, what change in Government Spending is required to reach the target? 8. If the MPS is .67 and the current GDP is $150,000 and the target level of GDP is $210,000, what change in Government Spending is required to reach the target? 9. If the MPS is .20 and the current GDP is $150,000 and the target level of GDP...
Investment Problem: 1. Assume the MPC is 3/4, if investment spending increase by $50 billion, the...
Investment Problem: 1. Assume the MPC is 3/4, if investment spending increase by $50 billion, the level of GDP will: 2. Assume the MPC is 2/3, if investment spending decreases by $30 billion, the level of GDP will: Export Problem: 3. If the multiplier in an economy is 4, a $50 billion increase in exports will: 4. If the multiplier in an economy is 3,a $30 billion decrease in exports will: Balanced Budget Problem: 5. If the MPC is .75...
The following are assumptions about an economy: MPS = 0.2. There are no income taxes or...
The following are assumptions about an economy: MPS = 0.2. There are no income taxes or transfers, and the economy does not trade. The price level is constant i.e. does not change in response to economic conditions. Due to a fall in autonomous investment, real GDP falls from $6,000 million to $5,000 million. The reduction in autonomous investment was equal to $ A million
\ **each option is fall or rise // or increase or decrease *** causes the gov...
\
**each option is fall or rise // or increase or decrease
*** causes the gov to run a budget SURPLUS or Deficit
(options)
**** last they want the graph curve shifted to reflect Scenario
3
10. The market for loanable funds and government policy The following graph shows the market for loanable funds. For each of the given scenarios, adjust the appropriate curve on the graph to help you complete the questions that follow. Treat each scenario separately by...
1. Which is not an effect of increases in gov. deficit spending? a) Capital inflow increase...
1. Which is not an effect of increases in gov. deficit spending? a) Capital inflow increase b)Increase in imports c)Increase in interest rates d)Decrease in exports e)Decrease in the trade deficit 2. The twin deficits effects is used to describe simultaneous deficits in the USA gov. budget and: a)International trade b)Monetary policy c)Gov. expenditures d)unemployment e)None of these 3. If an expansionary monetary policy increases the supply of US dollars, what effect will this have on the US dollar value...
15. According to the Keynesian-cross analysis, if MPC stands for marginal propensity to consume, then a...
15. According to the Keynesian-cross analysis, if MPC stands for marginal propensity to consume, then a rise in taxes of ΔT will: A) decrease equilibrium income by ΔT. B) decrease equilibrium income by ΔT/(1 – MPC). C) decrease equilibrium income by (ΔT)(MPC)/(1 – MPC). D) not affect equilibrium income at all. 16. Assume that a country’s MPS is equal to 0.4 and government expenditure is lowered by $20 billion, what is the effect on the country’s Y? A) It will...
The equilibrium price of lobster is $50. What is the equilibrium quantity is ______ thousand units...
The equilibrium price of lobster is $50.
What is the equilibrium quantity is ______ thousand
units (enter your response rounded to one decimal
place).
Assume a demand equation: Qd = 9-0.1p-Po + 0.01 pcrm + 0.000!Y; and a supply equation: as 0.1p - 0.02Pfg + 0.01N + 0.01T-0.1w where: p price of lobster Pb price of butter $3 pcm= price of crab meat-S200 Y consumer income $20,000 Q- quantity in thousands of units Pigprice of fishing gear $450 N number...
Why is the multiplier for a change in taxes smaller than for a change in spending?...
Why is the multiplier for a change in taxes smaller than for a change in spending? a. A change in taxes has no effect on aggregate demand, only on aggregate supply. b. A change in taxes directly affects government spending as well, lowering the multiplier. c. A change in taxes affects spending directly, but at a slower rate than spending does. d. A change in taxes affects disposable income and then consumption rather than spending directly. e. All of the...
The MPC is A) the change in consumption divided by the change in income. B) consumption divided by income. C) the c...
The MPC is A) the change in consumption divided by the change in income. B) consumption divided by income. C) the change in consumption divided by the change in saving. D) the change in saving divided by the change in income. The MPS is A) the change in saving divided by the change in income. B) 1 + MPC C) income divided by saving. D) total saving divided by total income Saving equals A) Y-C. B) Y - planned 1....
22. Why is the multiplier for a change in taxes smaller than for a change in spendi...
22. Why is the multiplier for a change in taxes smaller than for a change in spending? a. A change in taxes has no effect on aggregate demand, only on aggregate supply. b. A change in taxes directly affects government spending as well, lowering the multiplier. c. A change in taxes affects spending directly, but at a slower rate than spending does. d. A change in taxes affects disposable income and then consumption rather than spending directly....
The following are assumptions about an economy: MPS = 0.2. There are no income taxes or transfers, and the economy does not trade. The price level is constant i.e. does not change in response to economic conditions. Due to a fall in autonomous investment, real GDP falls from $6,000 million to $5,000 million. The reduction in autonomous investment was equal to $ A million
\
**each option is fall or rise // or increase or decrease
*** causes the gov to run a budget SURPLUS or Deficit
(options)
**** last they want the graph curve shifted to reflect Scenario
3
10. The market for loanable funds and government policy The following graph shows the market for loanable funds. For each of the given scenarios, adjust the appropriate curve on the graph to help you complete the questions that follow. Treat each scenario separately by...
The equilibrium price of lobster is $50.
What is the equilibrium quantity is ______ thousand
units (enter your response rounded to one decimal
place).
Assume a demand equation: Qd = 9-0.1p-Po + 0.01 pcrm + 0.000!Y; and a supply equation: as 0.1p - 0.02Pfg + 0.01N + 0.01T-0.1w where: p price of lobster Pb price of butter $3 pcm= price of crab meat-S200 Y consumer income $20,000 Q- quantity in thousands of units Pigprice of fishing gear $450 N number...
Why is the multiplier for a change in taxes smaller than for a change in spending? a. A change in taxes has no effect on aggregate demand, only on aggregate supply. b. A change in taxes directly affects government spending as well, lowering the multiplier. c. A change in taxes affects spending directly, but at a slower rate than spending does. d. A change in taxes affects disposable income and then consumption rather than spending directly. e. All of the...
The MPC is A) the change in consumption divided by the change in income. B) consumption divided by income. C) the change in consumption divided by the change in saving. D) the change in saving divided by the change in income. The MPS is A) the change in saving divided by the change in income. B) 1 + MPC C) income divided by saving. D) total saving divided by total income Saving equals A) Y-C. B) Y - planned 1....
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