>>If your answer is negative, be sure to put a minus sign in front of your answer. In a closed economy, the MPC is 0.50. Suppose that Government spending increases by $800. The change in equilibrium Real GDP is $ Suppose that Taxes increase by $600. The change in equilibrium Real GDP is $
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- Suppose that autonomous consumption is 1,500, government purchases are 500, planned investment spending is 1,000, net exports are - 250, and the MPC is 0.8. Equilibrium GDP is equal to $- (Enter your response as an integer.)suppose the government wishes to illuminate recessionary of a gdp of 100 billion in the MPC is .075. How much must the government increase in spending? Instead of increasing government spending by the amount you calculated what would be the effect of the government decreasing taxes by this amount explain?Suppose that the consumer’s consumption demand function is given by Cd = 0.8(Y−T)+10. Investment is Id = 20, government expenditure is G = 10, and tax is T = 10. What is the equilibrium GDP (income)? Suppose that government expenditure increases by 10 units while tax is unchanged. How will GDP change? What is the multiplier? Suppose that government expenditure increases by 10 units while tax also increases by 10 units. How will GDP change? What is the multiplier?
- Suppose the government seeks to achieve a balanced budget by levying taxes of $50 billion and making expenditures of $100 billion. How will this affect GDP if MPC=0.8?Suppose you are given the following information. Autonomous spending is at $3000, government spending is at $4000, investment spending is at $2000, net exports are $1000, taxes are set at $3000 and the mpc is .8 or 80%. What is the equilibrium level of output? What would happen if the government tried to balance the budget? The other day, it was announced the consumer confidence was up last month. This sounded good news bells for firms. Why? What would be affected in our equation above? Why would it matter? Suppose the government tried to balance the budget my cutting spending, what would be the equilibrium level of output? If there is “crowding out (or in)”, what else might change in your equation? What impact would that haveSuppose that for a given economy, the MPC = 0.95 and government purchases fall by $40 billion. As a result, Real GDP would be expected to _________ by ________________. Group of answer choices rise; $38 billion rise; $800 billion fall; $38 billion fall; $80 billion fall; $800 billion
- Suppose the MPC = 0.8 and the government increases spending by P100 billion, financing this spending with a P100 billion tax increase. Which of the following will be the likely effect of this action? a. Real GDP will expand by P100 billion b. Real GDP will contract by P100 billion c. Real GDP will expand by P500 billion d. Real GDP will expand by P400 billionEquations for C, I, G, and NX are given below. If the equilibrium level of GDP is $32,000, what will the new equilibrium level of GDP be if government spending increases to 2,500?C = 5,000 + (MPC)YI = 1,500G = 2,000NX = -500In a private closed economy where MPC= 0.8, if consumers reduce their spending by $20 billion and firms cut investments by $10 billion, then equilibrium GDP will decrease by
- The marginal propensity to consume out of permanent income equals 0.9 and the marginal propensity to consume out of transitory income equals 0.1. Suppose that there is an emergency increase in government spending of $200 billion to repair infrastructure. The spending takes place within a year. The spending increase is financed by a one-time increase in taxes. Prior to the increase in government spending, permanent income equals $9,600 billion and transitory income equals zero. (a) Compute the amounts of consumption expenditures and private saving prior to the tax increase. (b) Compute the amount of changes in consumption expenditures and private saving, given that the tax increase lasts for only one year. (c) Compute the initial change in aggregate demand that results from this combination of increases in government spending and taxes.Please answer the following questions based on the given information: a = 50, MPC -0.8, 1-100, G-200, EX-100, IM- 50 (where a is the autonomous spending. MPC is the marginal propensity to consume, I is the investment, G is the government spending, EX is the export, and IM is the import) 1) What is the equilibrium level of output (income), Ye, in this economy? 50 Agg Expenditure C+I+G+NX- M+I+G+NX p Agg Expenditure Income (Real GOP) 2) Suppose the Ye (actual GDP) that you derived from the previous question is lower than the potential GDP level. Calculate the G' value to find how much the government spending is required to reach the potential GDP at 2,400? G 48 degree P" => ↑ C++G+Nxx Aus GDP AET-CH-GNX AEZ-C+I+G+NX Y, GDP)suppose the government wishes to eliminate a recessionary GAP of 100 billion and the MPC is .75. How much must the government increase in spending instead of increasing government spending by the amount you calculated? What would be the effect of the government decreasing taxes by this amount explain?
