In the Keynesian-cross model, if the MPC equals 0.75 then a $2 billion increase in government...
Homework Answers
Ans. Increase in Income = Multiplier × Increase in Government Spending
= ( 1 ÷ 0.25 ) × $2 billion
= 4 × $2 BILLION
= $8 Billion
Hence the increase in income would be $8 billion .
Add Answer to:
In the Keynesian-cross model, if the MPC equals 0.75 then a $2
billion increase in government...
4. In the Keynesian-cross model with an MPC > 0, if government purchases increase by 250,...
4. In the Keynesian-cross model with an MPC > 0, if government purchases increase by 250, then the equilibrium level of income: A) increases by 250. B) increases by more than 250. C) decreases by 250. D) increases but by less than 250.
Q2. In the Keynesian cross model, equilibrium in the economy is obtained where planned spending equals...
Q2. In the Keynesian cross model, equilibrium in the economy is obtained where planned spending equals actual spending. (a) Explain what planned spending and actual spending are (b) Graphically present the equilibrium condition of the economy in the Keynesian cross model. (c) Explain how the economy adjusts to equilibrium if the economy finds itself with a level of planned spending which is less than actual spending (3 marks) (d) Explain why an increase in government spending leads to a greater...
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
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...
please answer 7,8,9,10. thank you so much!!:)) SECTION In the simple Keynesian model with an MPC...
please answer 7,8,9,10. thank you so much!!:))
SECTION In the simple Keynesian model with an MPC equal Keynesian model with an MPC equal to 0.80, a S50 billion increase in investment spending leads to a maximum: $50 billion increase in equilibrium income. b. 580 billion increase in equilibrium income $250 billion increase in equilibrium income. d. $400 billion increase in equilibrium income S500 billion increase in equilibrium income. when $2.000 increase in income causes a $1,800 increase in consumption spending...
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,...
If an economyʹs MPC is 0.75 and the MPM is 0.25, then an increase in government...
If an economyʹs MPC is 0.75 and the MPM is 0.25, then an increase in government spending of $2,000 will increase income by Select one: a. $3,000. b. $2,000. c. $4,000. d. $8,000.
QUESTION 21 Suppose investment spending initially increases by $50 billion in an economy whose MPC is...
QUESTION 21 Suppose investment spending initially increases by $50 billion in an economy whose MPC is 2/3. By how much will this ultimately change real GDP? O A $75 billion OB. $50 billion OC $ 150 billion D. $ 200 billion QUESTION 22 Which of the following statements is FALSE? O A When income increases MPS is constant When income increases APS Increases C. When income increases MPC is increases D. When income increases APC decreases QUESTION 23 If the...
Solve 1. 2. 3. 4. 5. 1 Keynesian Cross Assume that households' consumption function is given...
Solve 1. 2. 3. 4. 5.
1 Keynesian Cross Assume that households' consumption function is given by C(Y -T) 50+ 0.75(Y T), that firms' investment function is I(r) 150 10r, government spending is G 150, and the tax bill T 200. 1. What is the Marginal Propensity to Consume "MPC")? 2. What is the equilibrium level of real GDP in the goods market if the real interest rate is 5%? (Plug in r = 5 for 5%, rather than 0.05...
just answers 19 An increase il SI00. Which of the foll the MPC is 0.5 and...
just answers
19 An increase il SI00. Which of the foll the MPC is 0.5 and the increase in invesu the MPC is 0.5 and the increase in investment wd the MPC is 0.75 and the increase in investment was 25 the MPC is 0.75 and the increase in investment was 20 Assuming the new equilibrium income level is $400 and the level of full employment income is S600, there would be a: deflationary gap of $50 deflationary gap of...
please answer 7,8,9,10. thank you so much!!:))
SECTION In the simple Keynesian model with an MPC equal Keynesian model with an MPC equal to 0.80, a S50 billion increase in investment spending leads to a maximum: $50 billion increase in equilibrium income. b. 580 billion increase in equilibrium income $250 billion increase in equilibrium income. d. $400 billion increase in equilibrium income S500 billion increase in equilibrium income. when $2.000 increase in income causes a $1,800 increase in consumption spending...
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,...
QUESTION 21 Suppose investment spending initially increases by $50 billion in an economy whose MPC is 2/3. By how much will this ultimately change real GDP? O A $75 billion OB. $50 billion OC $ 150 billion D. $ 200 billion QUESTION 22 Which of the following statements is FALSE? O A When income increases MPS is constant When income increases APS Increases C. When income increases MPC is increases D. When income increases APC decreases QUESTION 23 If the...
Solve 1. 2. 3. 4. 5.
1 Keynesian Cross Assume that households' consumption function is given by C(Y -T) 50+ 0.75(Y T), that firms' investment function is I(r) 150 10r, government spending is G 150, and the tax bill T 200. 1. What is the Marginal Propensity to Consume "MPC")? 2. What is the equilibrium level of real GDP in the goods market if the real interest rate is 5%? (Plug in r = 5 for 5%, rather than 0.05...
just answers
19 An increase il SI00. Which of the foll the MPC is 0.5 and the increase in invesu the MPC is 0.5 and the increase in investment wd the MPC is 0.75 and the increase in investment was 25 the MPC is 0.75 and the increase in investment was 20 Assuming the new equilibrium income level is $400 and the level of full employment income is S600, there would be a: deflationary gap of $50 deflationary gap of...
Most questions answered within 3 hours.
-
The mayor of a small town estimates that 33% of the
residents in the town favor...
asked 38 minutes ago -
1. True or false: According to the Gordon Growth Model, firms
that pay dividends will always...
asked 1 hour ago -
20
Lansing Corporation reported net income of $67 million for last
year. Depreciation expense totaled $15...
asked 1 hour ago -
Write a MATLAB userdefined function that calculates the product and
the ratio of two variables x...
asked 1 hour ago -
Timia needs some cash in a hurry. She owns her car outright and
is considering a...
asked 1 hour ago -
A sweepstakes posted the probabilities of winning each prize and
the prize amounts as shown in...
asked 1 hour ago -
Synthesis of fructose-2,6-bisphosphate is catalyzed by a
bifunctional enzyme that contains two catalytic domains: PFK2
(kinase...
asked 1 hour ago -
observation
initial burst volume
total volume titrated to reach end point
what happened to the rise...
asked 1 hour ago -
Let x1, x2,x3,and x4 be a random sample from
population with normal distribution with mean ?...
asked 2 hours ago -
A string of mass m and length L is under tension T. The speed of
a...
asked 2 hours ago -
Look at the descriptions of high sensation seekers in your book.
They look like they would...
asked 2 hours ago -
Write a method called is1to1 that accepts a map whose keys and
values are strings as...
asked 2 hours ago