two countries A and B can each be described by a keynesian-cross model with lump-sum taxes....
Homework Answers
Add Answer to:
two
countries A and B can each be described by a keynesian-cross model
with lump-sum taxes....
Multiple Choice: 1) Assume the MPC is 0.75 and lump sum taxes are collected by the...
Multiple Choice: 1) Assume the MPC is 0.75 and lump sum taxes are collected by the government. What is the government tax multiplier? A) -1.33 B)-25 C)-75 D) -4 E)-3 During a Recession, the MPC tends to Increase, incrcases b) Decrease, decreases Decrease, increases the recessionary gap. 2) which c) d Increase, decreases 3) Suppose that the MPC is .75 and the U.S Federal Government reduces taxes by 10 million dollars. After 3 rounds of the multiplier process RGDP will...
In the Keynesian-cross model, if the MPC equals 0.75 then a $2 billion increase in government...
In the Keynesian-cross model, if the MPC equals 0.75 then a $2 billion increase in government spending increases the equilibrium level of income by __________. A) $1 billion. B) $3 billion. C) $4 billion. D) $2 billion.
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...
Multiple Choice: 1) Assume the MPC is 0.75 and lump sum taxes are collected by the government. What is the governm...
Multiple Choice: 1) Assume the MPC is 0.75 and lump sum taxes are collected by the government. What is the government tax multiplier? A)-1.33 B) - 25 C) - 75 D) -4 E) -3 , which the recessionary gap. 2) During a Recession, the MPC tends to a) Increase, increases b) Decrease, decreases c Decrease, increases d) Increase, decreases 3) Suppose that the MPC is.75 and the US Federal Government reduces taxes by 10 million dollars. After 3 rounds of...
The Multiplier in the Simple Model with No Income Taxes The simple government purchase multiplier is...
The Multiplier in the Simple Model with No Income Taxes The simple government purchase multiplier is given by 1/(1 - MPC). Suppose that the U.S. MPC is 0.9. Calculate the government purchase multiplier. If the U.S. government increases its spending by $100 billion to stimulate the economy devastated by the Coronavirus crisis, how much will U.S. GDP increase in the simple model?
For a real Keynesian model of a mixed economy with a marginal propensity to consume equal...
For a real Keynesian model of a mixed economy with a marginal propensity to consume equal to .8 and autonomous consumption equals 600 billion, planned investment equals 100 billion, government spending equals 300 billion, and taxes equal 300 billion: a. Calculate the equilibrium level of Ye or real output. b. Draw a diagram that illustrates the equilibrium condition for the model, the equilibrium level of output, and the level of autonomous spending. Be sure to carefully label your diagram, including...
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
14. (2 pt) Explain the effect of a discretionary cut in taxes of $40 billion on...
14. (2 pt) Explain the effect of a discretionary cut in taxes of $40 billion on the economy when the economy's MPC is .75. How does this discretionary fiscal policy differ from a discretionary increase in government spending of $40 billion? A tax cut of $40 billion will result in initial increase in consumption of S billion). (Note that $10Bil. is saved based on marginal propensity to save (MPS), that is 25 (because 1-MPC-MPS). Then .25 x $40-$10 billion). This...
Assume that, without taxes, the consumption schedule of an economy is as follows: a. What is...
Assume that, without taxes, the consumption schedule of an
economy is as follows:
a. What is the value of the MPC?
_______
.Graph the resulting consumption
schedule.
Instructions: Use the tool provided 'CE' to draw
the consumption schedule. Plot 8 points total.
b. Assume now that a lump-sum tax is imposed such that the
government collects $10 billion in taxes at all levels of GDP. Add
the after-tax consumption to the table below.
Compare the MPC and the
multiplier with...
35. Death and Taxes. The basic Keynesian Cross model from 11-1 in the textbook assumes taxes are exogenous and inde...
35. Death and Taxes. The basic Keynesian Cross model from 11-1 in the textbook assumes taxes are exogenous and independent of income, but that is not realistic so let's modify the model. i. Here are two options for modeling taxes as a function of income: a) T(Y) = 2 + 0.2Y or b) T(Y) = 2-0.2Y Which choice is more realistic? Briefly explain your choice to yourself. Suppose I = 6, C = 10 +0.5(Y-T) and G is unknown. Set...
Multiple Choice: 1) Assume the MPC is 0.75 and lump sum taxes are collected by the government. What is the government tax multiplier? A) -1.33 B)-25 C)-75 D) -4 E)-3 During a Recession, the MPC tends to Increase, incrcases b) Decrease, decreases Decrease, increases the recessionary gap. 2) which c) d Increase, decreases 3) Suppose that the MPC is .75 and the U.S Federal Government reduces taxes by 10 million dollars. After 3 rounds of the multiplier process RGDP will...
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...
Multiple Choice: 1) Assume the MPC is 0.75 and lump sum taxes are collected by the government. What is the government tax multiplier? A)-1.33 B) - 25 C) - 75 D) -4 E) -3 , which the recessionary gap. 2) During a Recession, the MPC tends to a) Increase, increases b) Decrease, decreases c Decrease, increases d) Increase, decreases 3) Suppose that the MPC is.75 and the US Federal Government reduces taxes by 10 million dollars. After 3 rounds of...
14. (2 pt) Explain the effect of a discretionary cut in taxes of $40 billion on the economy when the economy's MPC is .75. How does this discretionary fiscal policy differ from a discretionary increase in government spending of $40 billion? A tax cut of $40 billion will result in initial increase in consumption of S billion). (Note that $10Bil. is saved based on marginal propensity to save (MPS), that is 25 (because 1-MPC-MPS). Then .25 x $40-$10 billion). This...
Assume that, without taxes, the consumption schedule of an
economy is as follows:
a. What is the value of the MPC?
_______
.Graph the resulting consumption
schedule.
Instructions: Use the tool provided 'CE' to draw
the consumption schedule. Plot 8 points total.
b. Assume now that a lump-sum tax is imposed such that the
government collects $10 billion in taxes at all levels of GDP. Add
the after-tax consumption to the table below.
Compare the MPC and the
multiplier with...
35. Death and Taxes. The basic Keynesian Cross model from 11-1 in the textbook assumes taxes are exogenous and independent of income, but that is not realistic so let's modify the model. i. Here are two options for modeling taxes as a function of income: a) T(Y) = 2 + 0.2Y or b) T(Y) = 2-0.2Y Which choice is more realistic? Briefly explain your choice to yourself. Suppose I = 6, C = 10 +0.5(Y-T) and G is unknown. Set...
Most questions answered within 3 hours.
-
The correct answer will be upvoted with positive feedback,
giving me incorrect answers will result in...
asked 11 minutes ago -
Question:
Evaluation: Answer both (a) and (b): (a) Looking at
Table 6.1 in our text, explain...
asked 20 minutes ago -
What is the maximum number of edges that a graph on 7 vertices can
have if...
asked 41 minutes ago -
Question 05
(a) i) What are the three type of general defects in welding?
ii) Explain...
asked 26 minutes ago -
If the wage rate increases from $12 to $16 and, as a result, the
quantity demanded...
asked 31 minutes ago -
the slime layer external to the prokaryotic cell wall is called
the ?
asked 40 minutes ago -
Cheyenne Company must decide whether to make or buy some of its
components. The costs of...
asked 42 minutes ago -
What is the entropy change for mixing 1 liter of a monoatomic
ideal gas (call it...
asked 40 minutes ago -
A company that has 150 employees chooses a committee of 11 to
represent employee retirement issues....
asked 1 hour ago -
the
force between two 2.11 x 10^-4 C charges that are 2.11 meters apart
is ______N?
asked 1 hour ago -
A truck of mass m slows from speed v0 to speed v in a
time t....
asked 1 hour ago -
A 60kg box rests on a floor with a coefficient of kinetic
friction of 0.600 and...
asked 1 hour ago