C=250+0.8 (Y-T) I=400−30 r T=150 G=220 Y=C+I+G where Y is GDP, C is consumption, I is investment, T is taxes, G is government purchases, and r is the interest rate. If the economy were at full employment (that is, at its natural rate), GDP would be 3,000.  Assuming no change in fiscal policy, what change in the interest rate (Δr) would restore full employment? Δr=______ Assuming no change in monetary policy, what change in government purchases (ΔG) would restore full employment?

question 1

Using the AE model, show the economy in equilibrium. Then, show the impact of an increase in government spending to reduce the unemployment rate.Would the above be considered expansionary or contractionary fiscal policy?Assume the change in government spending in above is $25 billion dollars and MPC = .95. What will be the change in GDP?

Knowing that: The formula for economic impact is I(r)=(A)/1-r  ---(i)   The formula for impact change is ∆I= I'(r)*∆r ---(ii)   The formula for percentage change in spending  is g(r)=(r)/1-r ---(iii)

Consider a closed economy in which total output equals $13,000. The economy also has the following information: Consumption totals $6500 Government spending totals $2500 Private savings totals $3800 Carefully following all numeric instructions, tell me this economy's net taxes (T). Carefully following all numeric instructions, tell me this economy's public savings. Carefully following all numeric instructions, tell me this economy's economic investment.

If a recession persists due to nominal wage and price stickiness (i.e., slow adjustment of nominal wages downward), what kind of fiscal policy can bring us out of this recession?     decreased government expenditures and increased taxes   increased government expenditures and decreased taxes   decreased government expenditures   contractionary fiscal policy

Please answer the question below: If the current real GDP is P700 billion, which of the following policies would bring the economy to potential output? a. increase government spending by P25 billion b. increase government spending by P100 billion c. increase government spending by P20 billion d. decrease government spending by P100 billion   If current real GDP is P700 billion, which of the following policies would bring the economy to potential output? a. decrease taxes by P100 billion b. increase taxes by P100 billion c. decrease taxes by P25 billion d. increase taxes by P25 billion * the attached photo is just connected to the question *

Suppose a closed economy has an intended investment of 100 and an aggregate consumption function given by C = 250 + 0.75Yd.  Suppose also that the government spends 150 but collects no taxes.   What is equilibrium output and income?

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Assume an economy with no foreign sector, a marginal propensity to save of mps = 0.1, and a marginal income tax rate of t = 1/3. What change in government purchases would lead to an increase in national income of 500?