Suppose the federal government wishes to purchase goods and services valued at $200 billion today and...
Suppose the federal government wishes to purchase goods and services valued at $200 billion today and finances these expenditures by raising taxes. According to some economists, this will lead to what level of national consumption
Homework Answers
Federal government wishes to purchase goods and services valued at $200 billion today and finances these expenditures by raising taxes. This will lead to lower level of national consumption and higher level of national savings than if the expenditure had been financed by selling bonds i.e by borrowing.
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Suppose the federal government wishes to purchase goods and
services valued at $200 billion today and...
Suppose that the government increases its expenditure on goods and services by $100billion and pays for...
Suppose that the government increases its expenditure on goods and services by $100billion and pays for these goods and services by raising autonomous taxes by $100billion. What is the effect on aggregate demand and real GDP of each change individually and of the two combined?
Suppose that in 2016 the federal government spent $730 billion and collected $480 billion in taxes...
Suppose that in 2016 the federal government spent $730 billion and collected $480 billion in taxes while in 2017, government spending fell to $680 billion and government revenue increased to $780 billion. If the government debt was $5 trillion at the beginning of 2016, what will it be at the end of 2017? Select one: a. $5.35 trillion b. $5.25 trillion c. $5.15 trillion d. $4.85 trillion e. $4.75 trillion
Question 8 0.9 pts For this problem think about the goods market. Suppose the consumption equation is represented by th...
Question 8 0.9 pts For this problem think about the goods market. Suppose the consumption equation is represented by the following: C 200 0.75YD (where YD is disposable income), that investment is fixed ), and that government expenditures and taxes are determined exogenously. Suppose the economy is currently in equilibrium, but the government decides that it wants to achieve two goals: lead the economy to more output, and keep the government deficit at the current level. To achieve this, the...
Q1 Suppose that investment (I) is $400 billion, private saving (S) is $400 billion, (autonomous) taxes (T) are $500 billion, exports (X) are $300 billion, and imports (M) are $200 billion. (a)...
Q1 Suppose that investment (I) is $400 billion, private saving (S) is $400 billion, (autonomous) taxes (T) are $500 billion, exports (X) are $300 billion, and imports (M) are $200 billion. (a) What is the government expenditure on goods and services? (Hint: S=Yd-C) (b) What is the government budget balance? For parts (c) and (d), think of the loanable funds approach: (c) Is the government exerting a positive or negative impact on investment? (d) What fiscal policy action might increase...
18. Suppose that at the end of 2014, the government holds debt of $150 billion, has collected tax revenue of $50 billio...
18. Suppose that at the end of 2014, the government holds debt of $150 billion, has collected tax revenue of $50 billion, and has spent $75 billion. The national debt at the beginning of 2015 is: A) $25 billion. B) $125 billion. C) $175 billion. D) $275 billion. 19. What approach to federal finance would you agree with if you wanted federal government revenues to equal federal government expenditures every year? A) annually balanced budget B) cyclically balanced budget C)...
Consider an economy in which taxes, planned investment, government spending on goods and services, and net...
Consider an economy in which taxes, planned investment, government spending on goods and services, and net exports are autonomous, but consumption and planned investment change as the interest rate changes. You are given the following information concerning autonomous consumption, the marginal propensity to consume, planned investment, government purchases of goods and services, and net exports: Ca = 1,500 – 10r; c = 0.6; Ta = 1,800; Ip = 2,400 – 50r; G = 2,000; NX = -200 (a)Derive Ep and...
sing and government purchases are leakages. 8. In a mixed closed economy: A taxes and government...
sing and government purchases are leakages. 8. In a mixed closed economy: A taxes and government purchases are leakages, while investment and saving are injections. • taxes and investment are injections, while saving and government purchases are leakages. taxes and savings are leakages, while investment and government purchases are injections. 1. government purchases and saving are injections, while investment and taxes are leakages. 9. In a mixed open economy, the equilibrium GDP is determined at that point where: A.S. +M+...
1. Suppose the consumption function is C = $309 billion + 0.9Y If the government inc...
1. Suppose the consumption function is C = $309 billion + 0.9Y If the government increases spending on new goods and services by $50 what is amount of the cumulative shift in AD? Enter your answer in whole numbers. For example, if your answer is $450.25 then enter 450 2. If the AD shortfall is $600 billion and the MPC is 0.8, how large is the desired fiscal stimulus? If your answer is $50 billion then enter 50
Suppose the following are national accounts data for a given year for a fictitious country: $B AUD Consumption of fixed...
Suppose the following are national accounts data for a given year for a fictitious country: $B AUD Consumption of fixed capital ………………………………………………. 320 Gross private fixed capital formation……………………………………….. 785 Government consumption expenditure………………………………………. 585 Government investment expenditure………………………………………… 210 Imports of goods and services………………………………………………...565 Exports of goods and services………………………………………………...690 Household consumption expenditure………………………………………..3115 Net property and other income paid overseas………………………………….34 Returns to labour…………………………………………………………….2651 Firm profits………………………………………………………………….1687 Other factor rentals……………………………………………………………482 _____________________________________________________________________ (j) Suppose that tax revenues are $17 billion for the fiscal year, then what...
Ignoring any supply−side effects, suppose the government is considering cutting taxes by $100 billion or increasing...
Ignoring any supply−side effects, suppose the government is considering cutting taxes by $100 billion or increasing government expenditures on goods and services by $100 billion. Then A. the tax cut would increase aggregate demand and the increase in government expenditure would decrease aggregate demand. B. both policies would increase aggregate demand but the increase in government expenditure has a smaller effect. C. both policies would increase aggregate demand by the same amount. D. both policies would increase aggregate demand but...
Question 8 0.9 pts For this problem think about the goods market. Suppose the consumption equation is represented by the following: C 200 0.75YD (where YD is disposable income), that investment is fixed ), and that government expenditures and taxes are determined exogenously. Suppose the economy is currently in equilibrium, but the government decides that it wants to achieve two goals: lead the economy to more output, and keep the government deficit at the current level. To achieve this, the...
18. Suppose that at the end of 2014, the government holds debt of $150 billion, has collected tax revenue of $50 billion, and has spent $75 billion. The national debt at the beginning of 2015 is: A) $25 billion. B) $125 billion. C) $175 billion. D) $275 billion. 19. What approach to federal finance would you agree with if you wanted federal government revenues to equal federal government expenditures every year? A) annually balanced budget B) cyclically balanced budget C)...
sing and government purchases are leakages. 8. In a mixed closed economy: A taxes and government purchases are leakages, while investment and saving are injections. • taxes and investment are injections, while saving and government purchases are leakages. taxes and savings are leakages, while investment and government purchases are injections. 1. government purchases and saving are injections, while investment and taxes are leakages. 9. In a mixed open economy, the equilibrium GDP is determined at that point where: A.S. +M+...
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