7The graph below depicts an economy where an increase in aggregate demand has caused inflation. Assume the government decidesto conduct fiscal policy by changing taxes to bring inflation under control.Fiscal Policy160LRAS150AS14013012011010090AD,807060AD504080 160 240 320 400 480 560 640 720 800Real GDP (billions of dollars)7 of 14Next >McGrawHill< PrevMatch DiacriticsWhole WordsHighlight All Match CaseTyne here to searchPrice Level 60AD504080 160 240 320 400 480 560 640 720 800Real GDP (billions of dollars)Instructions: Enter your answer as a whole number. If you are entering a negative number include a minus sign.a. How much does aggregate demand need to change to restore the economy to its long-run equilibrium?$4billionb. If the MPC is 0.5, how much do taxes need to change to shift aggregate demand by the amount you found in part a?$4billionSuppose instead that the MPC is 0.75.c. How much does aggregate demand and taxes need to change to restore the economy to its long-run equilibrium?Aggregate demand needs to change by $billion and taxes need to change by $billion.

a. How much does aggregate demand need to change to restore the economy to its long-run equilibrium? $4 billion b. If the MPC is 0.5, how much do taxes need to change to shift aggregate demand by the amount you found in p %24 billion Suppose instead that the MPC is 0.75. c. How much does aggregate demand and taxes need to change to restore the economy to its long-run equilibriu Aggregate demand needs to change by $ billion and taxes need to change by $ billion.

a. How much does aggregate demand need to change to restore the economy to its long-run equilibrium? $4 billion b. If the MPC is 0.5, how much do taxes need to change to shift aggregate demand by the amount you found in p %24 billion Suppose instead that the MPC is 0.75. c. How much does aggregate demand and taxes need to change to restore the economy to its long-run equilibriu Aggregate demand needs to change by $ billion and taxes need to change by $ billion.

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

See similar textbooks

Similar questions

B Why do lenders need liquidity? to qualify for FHA insurance so they can put their money in long- term assets so they have the funds to originate more loans so loans can be packaged together to create MBSS 19:31 ✓
(3) How to interpret relationship between changes of GDP growth rate and unemployment rate? Now go to your notes (slides). Is the relationship you plotted similar as the Okun's Law predicts? Suppose you got a relation as GDP = a + b * UNemp, Are the coefficients of a and b are close to the value of Okun's Law? (4) Now repeat the plot you did in part (2) above. However, this time you use the sample only from 2000 to 2019. Any change to the relationship? How is the value of a and b in this sample?
Investment is a larger portion of GDP than consumption, but is substantially less volatile. Investment rises OA. sharply during recessions and falls sharply during booms OB. slowly during booms and falls slowly during recessions OC. sharply during booms and falls sharply during recessions OD. sharply with exports and falls sharply with imports
EDNA RAYMOND (84EA700%asonal Comfortu Stare dome The term "subprime or nonprime" refers to which of the following credit risk characteristics of individual borrowers? 0 0 0 0 Low loan-to-value ratios Low debt-to-income ratios High credit scores High levels of past loan delinquencies Butt
The consumption function for a closed economy with no government sector is given by theequation:C = £200 million + 0.8 Ywhere C is aggregate consumption and Y is national income.(i) Calculate the value of aggregate savings if the level of national income is £4000 million.(ii) Calculate the equilibrium level of national income if the level of planned investment is£600 million(iii) Calculate the level of aggregate consumption at the equilibrium level of nationalincome if the level of planned investment is £1000 million(iv) Calculate the change in national income if planned investment rose from £600 millionto £800 million
Suppose the economy is in recession. Policymakers estimate that aggregate demand is$100 billion short of the amount necessary to generate the long run natural rate of output.That is, if aggregate demand were shifted to the right by $100 billion, the economy wouldbe in long run equilibrium.a. Explain the impact on the economy if the government chooses to use fiscal policy tostabilize the economy and the marginal propensity to consume (MPC) is given as0.75 with no crowding out.b. If there is a crowding out effect and investment is very sensitive to changes in theinterest rate, should the government increase spending more or less than this amount?
Discuss the following statement: “Economists are predicting that interest rates willcontinue to be under 10 percent for at least 15 years.”
Size of the Warehouse Good Market ($) Fair Market ($) Poor Market ($) Small 40,000 18,000 -10,000 Medium 80,000 90,000 -20,000 Large Very Large 100,000 350,000 175,000 -40,000 -160,000 25,000 Probabilities 0.35 0.45 0.20
Stock market Some inves-tors believe that stock prices show weekly patterns, claim-ing for example that Fridays are more likely to be “up” days. From the trading ses-sions since October 1, 1928 we selected a random sampleof 1000 days on which the Dow Jones Industrial Aver-age (DJIA) showed a gain in stock prices. The table shows how many of these fell on each day of the week.Sure enough, more of them are Fridays—and Tuesday looks like a bad day to own stocks. Can this be ex-plained as just randomness, or is there evidence here to help an investor? Day ofthe WeekNumber of“up” DaysMon 192Tues 189Wed 202Thu 199Fri 218
An electronic appliance manufacturer wants to know if there is a relationship between percentage change in deposable personal income which is reported quarterly by the government, and the percentage change in appliances sold by the manufacturer following same years of quarterly data. Brenda Chee and Clarence Paulus lead an analyst team has obtained data for the past 10 quarters. Table 3 Quarter Percent change in income Percent Change in appliance sold Quarter Percent change in income Percent Change in appliance sold 1 -2.3 -2.5 6 -1.0 1.0 2 -1.5 -1.0 7 0.7 1.4 3 2.8 7.4 8 5.2 3.4 4 0.5 2.6 9 -2.5 -0.5 5 4.6 8.5 10 1.7 1.8 1) What forecasting model should be used for this data.Why? 2) Develop the forecasting model that you have proposed in(a). 3) Compute the relationship for these data. In your opinion, is the relationship between independent variable strong enough to base a predictive the…
F4 5 % T Carlos is buying a property from Bobby. The annual property taxes equaled $2,000. Bobby owes Carlos for 3 months and 10 days of prorated property taxes. F5 Carlos? Using the 360-day calendar, how much does Bobby owe Q Search $666.67 6 $555.61 0+ $166.67 F6 $500.01 V 80 F7 & 7 E ✈ F8 8 2 F9 ( 9 F10 0 XLON F11 F12 Insert +1 O PrtSc ON Delete
Why is it usually a bad idea to buy a newly completed condo unit to flip for a quick profit? A In a rising market, condos typically rise in value faster than single family homes B In a rising markets condos typically rise more slowly in value than single family homes C Condos price tend to rise at times when single family houses prices dropping D In a failing market, condos typically drop in value more slowly than single family homes