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 is $175,000 what change in taxes would be required to reach the target?
10. If the MPS is .90 and the current GDP is $160,000 and the target level of GDP is $130,000 what change in taxes would be required to reach the target?
Homework Answers
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7. If the MPS is .25 and the current GDP is $180,000 and the
target level...
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...
Question 7 1 pts The equilibrium level of real GDP is $1,000, the target level of...
Question 7 1 pts The equilibrium level of real GDP is $1,000, the target level of real GDP is $1,250, and the marginal propensity to consume (MPC) is 0.80. The target can be reached if government spending is: increased by $100 billion increased by $50 billion increased by $250 billion. O held constant. Question 8 1 pts The tax multiplier equals 1 spending multiplier True False
QUESTION 7 1 pc Assume C 50+.80yd (disposable income); Taxes GDP (V)? (Hint: Yd = Y...
QUESTION 7 1 pc Assume C 50+.80yd (disposable income); Taxes GDP (V)? (Hint: Yd = Y - Taxes) 10; Investment - 30: Goverment - 20: Exports 16; and Imports - 20. What is the O a 200 26.400 c. 405 d. 435 QUESTION 8 From the question above, C (consumption) is equal to 360 390 O 414 OO QUESTION 9 Use the following table to find the MPC and MPS: SA NI Answ QUESTION 9 Ube the following table to...
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...
suppose the actual GDP is $15 trillion & the potential real GDP is $18 trillion. If the MPS is .03 What kind of GDP is this economy experiencing? what kind fiscal policy & monetary policy woul...
suppose the actual GDP is $15 trillion & the potential real GDP is $18 trillion. If the MPS is .03 What kind of GDP is this economy experiencing? what kind fiscal policy & monetary policy would u recommend to eliminate the gap (include a graph to illustrate the relationship) By how much the government should change taxes to eliminate the gap?
help with those problema please 19 trhough 23 please 19. a. Complete the table below. All...
help with those problema please 19 trhough 23
please
19. a. Complete the table below. All figures are dollar amounts. Assume planned investment - $25 and note that once planned investment is determined, it stays constant (in our model) regardless of the level of GDP. Remember that U.LI. unplanned inventory investment (which is Y - pl AE). Y=GDP pl AE U.I.I pl I 1310 1301 -16 25 1326 1320 1307 25 1330 17 25 1340 1319 21 25 1350 1325...
#6 Consider an economy that is operating at the full-employment level of real GDP with MPC=0.7...
#6 Consider an economy that is operating at the full-employment level of real GDP with MPC=0.7 MPC=0.7 . The short-run effect on equilibrium real GDP of a $50 billion increase in government spending ( G G ), balanced by a $50 billion increase in taxes, is...…………. abillion (Increase or Decrease) in real GDP. #7 Suppose that the MPC in a country is 0.9. Complete the following table by calculating the change in GDP predicted by the multiplier process given each...
Suppose that potential GDP is $7.8 trillion and the equilibrium real GDP is $7 trillion. If...
Suppose that potential GDP is $7.8 trillion and the equilibrium real GDP is $7 trillion. If the Keynesian spending multiplier is 2, what is the level of fiscal stimulus (government spending) required to move the economy back to potential GDP? Show your work and explain.
The government does not like the change in GDP induced by the fall in private invest-...
The government does not like the change in GDP induced by the fall in private invest- ment. It wants to bring it back to the level found in Question (5). For that purpose, it has the options to change its spending or to change taxes. (a) If the government changes its spending alone, find the level of AG required to coun- teract the effect on GDP of the fall in investment. Explain what happened. (4 points) (b) If the government...
need help Myuu Tourer Caicos 25 5. The annual (Initial) GDP of a Simple Open economy...
need help
Myuu Tourer Caicos 25 5. The annual (Initial) GDP of a Simple Open economy is 10,000 units with annual savings (S) of 1000 units and a 20% Tax Rate (T) and a 16% Transfer Payment rate (R). (a) Show and explain the changes on annual GDP, Consumption (C), Savings (S) and Net Taxes (T-R) to an increase in annual Goverment Spending from 1000 units to 1500 units? (b) What would be the change on the annual GDP, Consumption...
Question 7 1 pts The equilibrium level of real GDP is $1,000, the target level of real GDP is $1,250, and the marginal propensity to consume (MPC) is 0.80. The target can be reached if government spending is: increased by $100 billion increased by $50 billion increased by $250 billion. O held constant. Question 8 1 pts The tax multiplier equals 1 spending multiplier True False
QUESTION 7 1 pc Assume C 50+.80yd (disposable income); Taxes GDP (V)? (Hint: Yd = Y - Taxes) 10; Investment - 30: Goverment - 20: Exports 16; and Imports - 20. What is the O a 200 26.400 c. 405 d. 435 QUESTION 8 From the question above, C (consumption) is equal to 360 390 O 414 OO QUESTION 9 Use the following table to find the MPC and MPS: SA NI Answ QUESTION 9 Ube the following table to...
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...
help with those problema please 19 trhough 23
please
19. a. Complete the table below. All figures are dollar amounts. Assume planned investment - $25 and note that once planned investment is determined, it stays constant (in our model) regardless of the level of GDP. Remember that U.LI. unplanned inventory investment (which is Y - pl AE). Y=GDP pl AE U.I.I pl I 1310 1301 -16 25 1326 1320 1307 25 1330 17 25 1340 1319 21 25 1350 1325...
The government does not like the change in GDP induced by the fall in private invest- ment. It wants to bring it back to the level found in Question (5). For that purpose, it has the options to change its spending or to change taxes. (a) If the government changes its spending alone, find the level of AG required to coun- teract the effect on GDP of the fall in investment. Explain what happened. (4 points) (b) If the government...
need help
Myuu Tourer Caicos 25 5. The annual (Initial) GDP of a Simple Open economy is 10,000 units with annual savings (S) of 1000 units and a 20% Tax Rate (T) and a 16% Transfer Payment rate (R). (a) Show and explain the changes on annual GDP, Consumption (C), Savings (S) and Net Taxes (T-R) to an increase in annual Goverment Spending from 1000 units to 1500 units? (b) What would be the change on the annual GDP, Consumption...
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