ZuoTi.Pro
Question

Suppose that real GDP is currently $20.5 trillion, potential GDP is $23.2 trillion, the government purchases...

Suppose that real GDP is currently $20.5 trillion, potential GDP is $23.2 trillion, the government purchases multiplier is 1.8, and the tax multiplier is -1.9. Holding other factors (such as prices and interest rates) constant, how will taxes (T) need to change to bring the economy to equilibrium at potential GDP? Provide your answer in dollars measured in trillions rounded to two decimal places.

business   economics   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

0 0
Add a comment
Know the answer?
Add Answer to:
Suppose that real GDP is currently $20.5 trillion, potential GDP is $23.2 trillion, the government purchases...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • Suppose that real GDP is currently $20.6 trillion, potential GDP is $22.7 trillion, the government purchases...

    Suppose that real GDP is currently $20.6 trillion, potential GDP is $22.7 trillion, the government purchases multiplier is 1.0, and the tax multiplier is -1.2. Holding other factors (such as prices and interest rates) constant, how will taxes (T) need to change to bring the economy to equilibrium at potential GDP? Provide your answer in dollars measured in trillions rounded to two decimal places. Use a negative sign "-" for negative changes. Do not include any symbols, such as "$,"...

  • Suppose that real GDP is currently $13.88 trillion and potential real GDP is​ $14.0 trillion, or...

    Suppose that real GDP is currently $13.88 trillion and potential real GDP is​ $14.0 trillion, or a gap of $1,000 billion. The government purchases multiplier is 3.3, and the tax multiplier is 2.3. Holding other factors​ constant, by how much will government purchases need to be increased to bring the economy to equilibrium at potential​ GDP? Government spending will need to be increased by $___ billion. ​(Enter your response rounded to the nearest whole​ number.) Holding other factors constant, by...

  • help with part c please!!! Suppose that real GDP is currently 51.47 trillion potential GDP is...

    help with part c please!!! Suppose that real GDP is currently 51.47 trillion potential GDP is $1.53 trillion, the government purchases multiplier is 2, and the tax multiplier is -15 a. Holding other factors constant, government purchases will need to be increased by $ 0.03 trillion to bring the economy to equilibrium at potential GDP (Round fo four decimal places as needed.) b. Holding other factors constant, taxes have to be cut by $ 0.04 trillion to bring the economy...

  • Related to Solved Problem #4] Suppose that real GDP is currently $13.1 trillion and potential real...

    Related to Solved Problem #4] Suppose that real GDP is currently $13.1 trillion and potential real GDP is $14.0 trillion, or a gap of $900 billion. The government purchases multiplier is 5.0, and the tax multiplier is 4.0 Holding other factors constant, by how much will government purchases need to be increased to bring the economy to equilibrium at potential GDP? Government spending will need to be increased by Sllon. (Enter your response rounded to the nearest whole number.)

  • Consider the following simplified balance sheet for a bank.  Suppose the required reserve ratio decreases from 10 percen...

    Consider the following simplified balance sheet for a bank.  Suppose the required reserve ratio decreases from 10 percent to 5 percent. By how much will bank deposits increase?   Provide your answer in dollars measured in thousands rounded to two decimal places. Do not include any symbols, such as "$," "=," "%," or "," in your answer. Assets Liabilities Reserves $10 thousand Deposits $100 thousand Consider the following simplified balance sheet for a bank.  Suppose the required reserve ratio decreases from...

  • 1.) Suppose an economy is initially in equilibrium when GDP equals $16 trillion. Now suppose government...

    1.) Suppose an economy is initially in equilibrium when GDP equals $16 trillion. Now suppose government spending increases by $0.3 trillion and that the economy's multiplier is 3. What is the new equilibrium level of GDP? Provide your answer in dollars measured in trillions round to two decimal places. Do not include any symbols, such as "$," "=," "%," or "," in your answer.

  • 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.

  • suppose the actual GDP is $15 trillion & the potential real GDP is $18 trillion. If...

    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?

  • Problem 4.1 Question Help The new bridge to the United States in Southern Ontario and similar...

    Problem 4.1 Question Help The new bridge to the United States in Southern Ontario and similar construction projects elsewhere in the country would be expected to help the economy in the short run, because O A. the use of discretionary fiscal policy would create an one time increase in real GDP but result in a job-less recovery. O B. the use of discretionary fiscal policy would create an one time increase in real GDP and employment. O C. the use...

  • 1. GDP is _____  11 trillion/ 16 trillion/ 10 trillion / 14 trillion /12 trillion 2. currently...

    1. GDP is _____  11 trillion/ 16 trillion/ 10 trillion / 14 trillion /12 trillion 2. currently _____ recessionary gap / inflationary gap 3. of ______ 4 trillion / 1 trillion / 5 trillion / 2 trillion / 3 trillion 4. the Fed will ____ increase / decrease 5. which will _____ increase/ decrease 6. incentive to ____ increase / decrease 7. shifting the ____ AD / SRAS / LRAS 8. curve to the ____ left / right 9. relatively high...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT