The government of the country intends to increase government spending in order to increase GDP by...
The government of the country intends to increase government spending in order to increase GDP by $950 million from $32.11 billion. If there is a multiplier of 4, calculate the increase in government spending needed to bring about the desired change in GDP.
Homework Answers
ANswer
the increase in government spending needed to bring about the desired change in GDP.= the desired change in GDP/multiplier
=950/4
=237.5 million
The government spending required to increase by $237.5 million
Add Answer to:
The government of the country intends to increase government
spending in order to increase GDP by...
(1) Calculate the government spending multiplier if, an increase in government spending by $5 million increases...
(1) Calculate the government spending multiplier if, an increase in government spending by $5 million increases real GDP by $20 million. Group of answer choices 0.20 0.25 2 5 4 (2) A major benefit of automatic stabilizers is that they: Group of answer choices guarantee a balanced budget over the course of the business cycle. have a tendency to reduce the national debt. moderate the effect of fluctuations in the business cycle. require legislative review by Congress before they can...
Initial increase in business spending by 15 billion, increase real GDP from $ 100 billion to...
Initial increase in business spending by 15 billion, increase real GDP from $ 100 billion to $ 160 billion. Calculate multiplier. Discuss the relationship between investment (business spending) and multiplier. Minimum 150 words with proper refences and citation.
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...
Suppose that the current equilibrium GDP for a country is $13.5 trillion and that potential GDP...
Suppose that the current equilibrium GDP for a country is $13.5 trillion and that potential GDP is $14.3 trillion. How much does a change in tax revenue restore the economy to potential GDP, assuming the value of the government purchase multiplier is equal to 2 and a tax multiplier equal to -1.6 tax revenue decreases by $800 billion tax revenue increase by $800 billion tax revenue decrease by $500 bilion tax revenue decrease by $400 billion Suppose that the government...
Assume that if there were no crowding out, an increase in government spending would increase GDP...
Assume that if there were no crowding out, an increase in government spending would increase GDP by $100 billion. On the other hand, if there had been full crowding out, then GDP would have Group of answer choices not increased. increased by $100 billion. increased by more than $100 billion. increased by less than $100 billion.
1. The savings rate in a country is 25%. The government wants to expand GDP by...
1. The savings rate in a country is 25%. The government wants to expand GDP by $300 Billion. How much must they increase Government spending to reach that goal?
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...
#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...
4a. The government of Peru is facing an inflationary gap. Presume they plan a tax increase...
4a. The government of Peru is facing an inflationary gap. Presume they plan a tax increase of $35 billion and spending decreases of $15 Billion. The MPC for the country is 0.55. We are curious what the fiscal impact will be from the policy. What would be the total decrease in GDP based on the fiscal multiplier using the data above? 4b. Let's use a more realistie multiplier - Let's add some realism to the exercise and include the effects...
1. Suppose the MPC is 0.8 and the crowding out effect is $30 billion. The government...
1. Suppose the MPC is 0.8 and the crowding out effect is $30 billion. The government aims to increase GDP by $250 billion. a) Calculate the fiscal multiplier b) how much the government needs to increase spending to increase GDP by $250 billion c) Calculate the tax cut multiplier, d) How much the government needs to cut taxes to increase GDP by $250 billion? e) Explain why the tax multiplier is smaller than the fiscal multiplier. f) If you were...
Initial increase in business spending by 15 billion, increase real GDP from $ 100 billion to $ 160 billion. Calculate multiplier. Discuss the relationship between investment (business spending) and multiplier. Minimum 150 words with proper refences and citation.
Suppose that the current equilibrium GDP for a country is $13.5 trillion and that potential GDP is $14.3 trillion. How much does a change in tax revenue restore the economy to potential GDP, assuming the value of the government purchase multiplier is equal to 2 and a tax multiplier equal to -1.6 tax revenue decreases by $800 billion tax revenue increase by $800 billion tax revenue decrease by $500 bilion tax revenue decrease by $400 billion Suppose that the government...
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...
4a. The government of Peru is facing an inflationary gap. Presume they plan a tax increase of $35 billion and spending decreases of $15 Billion. The MPC for the country is 0.55. We are curious what the fiscal impact will be from the policy. What would be the total decrease in GDP based on the fiscal multiplier using the data above? 4b. Let's use a more realistie multiplier - Let's add some realism to the exercise and include the effects...
Most questions answered within 3 hours.
-
All of the following are primary elements of just-in-time
except ____.
Group of answer choices
have...
asked 1 minute ago -
The coefficients respectively for X1, X2, X3, X4 and X5 are .01,
.02, .03, .04 and...
asked 1 minute ago -
Tree Species: Sugar Maple (Acer Saccharum)
Explain the re-translocation processes in Sugar Maple, what
nutrients are...
asked 2 minutes ago -
What is the methodology that should be used when developing a
risk management plan for an...
asked 57 minutes ago -
The factory method and the abstract factory pattern use
different object oriented
mechanisms are used to...
asked 4 hours ago -
Given the data below for the monthly sales data at each branch in
your region for...
asked 5 hours ago -
Blossom Company owns 10000 of the 50000 outstanding shares of
Taylor, Inc. common stock. During 2018,...
asked 6 hours ago -
Calculate the following: ***SHOW ALL WORK!!!! Or
NO CREDIT*** Circle your answers. 8pts
each
In the...
asked 8 hours ago -
Bank Z is currently advertising interest rates on its checking
account. They claim to pay an...
asked 8 hours ago -
List two ways of transformation on the response variable that
can be used to deal with...
asked 9 hours ago -
If a 2000 ohm resistor has a -3.90 mA current going through it.
What is the...
asked 9 hours ago -
Please comment on the sentences.
Some types of jobs require more training than others. Some
companies...
asked 10 hours ago