If government purchases increased by $200 billion and net taxes decreased by $200 billion, in the...
If government purchases increased by $200 billion and net taxes decreased by $200 billion, in the Keynesian model, ignoring any crowding out effects, aggregate demand would:
a)Increase by $200 billion if MPC was 0.5
b) Increase by $600 billion if MPC was 0.5
c)Increase by $200 billion regardless of MPC
d)Decrease by $200 billion regardless of MPC
e)Do none of the above
Homework Answers
Add Answer to:
If government purchases increased by $200 billion and
net taxes decreased by $200 billion, in the...
Attempts: Score: /3 15. Problems and Applications Q8 Suppose the government reduces taxes by $20 billion,...
Attempts: Score: /3 15. Problems and Applications Q8 Suppose the government reduces taxes by $20 billion, there is no crowding out, and the marginal propensity to consume is 3/4. billion increase in aggregate demand. The total effect of the tax cut on aggregate demand is The initial effect of the tax reduction is a $ a $ billion The total effect of this $20 billion tax cut is the total effect that a $20 billion increase in government purchases would...
Assume the government cuts taxes by $200 billion. If the MPC is 0.8, what is the maximum potential impact on real GDP according to the simple Keynesian model?
Assume the government cuts taxes by $200 billion. If the MPC is 0.8, what is the maximum potential impact on real GDP according to the simple Keynesian model? Real GDP increases by $1,000 billion Real GDP Increases by $800 billion Real GDP decreases by 51.000 billion Real GDP decreases by 5000 buttonIn Keynesian theory, if the marginal propensity to consume is 0.90 and government spending is increased by $50 billion, then real income (GDP) will maximum of billion by a decrease: $500 decrease $50 Increase: $500 Increase: $50
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...
1) If the government wants to reduce unemployment, government purchases should be ________ and/or taxes should be ______...
1) If the government wants to reduce unemployment, government purchases should be ________ and/or taxes should be ________. a) increased; decreased b) increased; increased c) decreased; decreased d) decreased; increased 2) The President of Vulcan hires you as an economic consultant. He is concerned that the output level in Vulcan is too high and that this will cause prices to rise. He feels that it is necessary to reduce output by $10 billion. He tells you that the MPC in...
Question 14 6 pts Assume the government cuts taxes by $250 billion. If the MPC is...
Question 14 6 pts Assume the government cuts taxes by $250 billion. If the MPC is 0.8, what is the maximum potential impact on real GDP according to the simple Keynesian model? Real GDP decreases by $1,000 billion Real GDP decreases by $1.250 billion Real GDP increases by $1,000 billion Real GDP increases by $1.250 billion D Question 15 6 pts in Keynesian theory, if the marginal propensity to consume is 0.90 and government spending is increased by $40 billion,...
For the following problems, use the information provided to determine which direction the AD will shift...
For the following problems, use the information provided to determine which direction the AD will shift and by how much the AD curve will shift. 7. Assume the MPC is 0.75. Assuming only the multiplier effect matters, a decrease in government purchases of $100 billion will shift the aggregate demand curve to the 8. Assume the multiplier is 5 and that the crowding-out effect is $20 billion. An increase in government purchases of $10 billion will shift the aggregate-demand curve...
1. Suppose the federal government observes a decrease in net exports. Examine this event in terms...
1. Suppose the federal government observes a decrease in net exports. Examine this event in terms of the aggregate demand and aggregate supply model. a. The decrease in net exports will cause (Click to select) [a decrease in short-run aggregate supply / an increase in short-run aggregate supply / an increase in aggregate demand / a decrease in aggregate demand]. b. This will lead to (Click to select) [a decrease / an increase] in the price level and (Click to select)...
please show solutions also. Thanks Question 4 In a simple Keynesian model, assume that the marginal...
please show solutions also. Thanks
Question 4 In a simple Keynesian model, assume that the marginal propensity to consume (MPC) is 0.5. a) Find the government purchases multiplier b) Find the tax multiplier c) If the government wants to increase equilibrium real GDP by $ 500 billion, how much should the government increase spending? d) For the same purpose, how much should the government decrease taxes? According to Ricardian equivalence, do you think the government estimate is correct (should the...
The government of Pangea, a small open economy with a flexible exchange rate, has increased government...
The government of Pangea, a small open economy with a flexible exchange rate, has increased government spending by $20 billion. Economists argue that after the crowding-out effect on investment and the crowding-out effect on net exports, the increases in government spending will not affect aggregate demand. Arrange each statement in the proper sequence of events from first to last, to illustrate the reasoning behind this argument. First reduction in net exports due to the appreciation of the domestic currency increased...
Suppose the MPC is 0.60. Assume there are no crowding out or investment accelerator effects. If...
Suppose the MPC is 0.60. Assume there are no crowding out or investment accelerator effects. If the government increases expenditures by $200 billion, then by how much does aggregate demand shift to the right? If the government decreases taxes by $200 billion, then by how much does aggregate demand shift to the right? A. $500 billion and $300 billion B. $500 billion and $500 billion C. $300 billion and $300 billion D. $300 billion and $180 billion
Attempts: Score: /3 15. Problems and Applications Q8 Suppose the government reduces taxes by $20 billion, there is no crowding out, and the marginal propensity to consume is 3/4. billion increase in aggregate demand. The total effect of the tax cut on aggregate demand is The initial effect of the tax reduction is a $ a $ billion The total effect of this $20 billion tax cut is the total effect that a $20 billion increase in government purchases would...
Question 14 6 pts Assume the government cuts taxes by $250 billion. If the MPC is 0.8, what is the maximum potential impact on real GDP according to the simple Keynesian model? Real GDP decreases by $1,000 billion Real GDP decreases by $1.250 billion Real GDP increases by $1,000 billion Real GDP increases by $1.250 billion D Question 15 6 pts in Keynesian theory, if the marginal propensity to consume is 0.90 and government spending is increased by $40 billion,...
For the following problems, use the information provided to determine which direction the AD will shift and by how much the AD curve will shift. 7. Assume the MPC is 0.75. Assuming only the multiplier effect matters, a decrease in government purchases of $100 billion will shift the aggregate demand curve to the 8. Assume the multiplier is 5 and that the crowding-out effect is $20 billion. An increase in government purchases of $10 billion will shift the aggregate-demand curve...
please show solutions also. Thanks
Question 4 In a simple Keynesian model, assume that the marginal propensity to consume (MPC) is 0.5. a) Find the government purchases multiplier b) Find the tax multiplier c) If the government wants to increase equilibrium real GDP by $ 500 billion, how much should the government increase spending? d) For the same purpose, how much should the government decrease taxes? According to Ricardian equivalence, do you think the government estimate is correct (should the...
The government of Pangea, a small open economy with a flexible exchange rate, has increased government spending by $20 billion. Economists argue that after the crowding-out effect on investment and the crowding-out effect on net exports, the increases in government spending will not affect aggregate demand. Arrange each statement in the proper sequence of events from first to last, to illustrate the reasoning behind this argument. First reduction in net exports due to the appreciation of the domestic currency increased...
Most questions answered within 3 hours.
-
This question is from the textbook "Python for ArcGIS" by Laura
Tateosian:
Write a script "triangles.py"...
asked 3 minutes ago -
1.What process is pushing back against gravity in the very
center (the core) of sun-like stars?...
asked 4 minutes ago -
Which of the following is an impediment that makes it
difficult for firms to achieve the...
asked 4 minutes ago -
Calculate the amount of heat needed to boil 123.g of octane
(C8H18), beginning from a temperature...
asked 12 minutes ago -
my
prof asked us to make a problem set then we find solve it
Chi-Square Test...
asked 19 minutes ago -
In recent years, 80% of those accused of Driving Under the
Influence (DUI) get convicted (includes...
asked 29 minutes ago -
Why does Max Weber distinguish between "power," "authority," and
different types of authority? What is he...
asked 29 minutes ago -
What would the solow growth model look like if there was a
production function which had...
asked 34 minutes ago -
A company project has an initial cost of $40,000, expected net
cash flows of $9,000 per...
asked 36 minutes ago -
How do you use strategy in your current position or how does
your current position align...
asked 38 minutes ago -
a person's ability to be properly diagnosed with a
disease/condition can be affected by the person;s...
asked 37 minutes ago -
John needs 40 Eternal Light flashlights. Each Eternal Light
flashlight requires 3 bulbs, and each bulb...
asked 45 minutes ago