Consider two policies: a tax cut that will last for only one year and a tax cut that is expected to be permanent.   True or False: A tax cut that is expected to be permanent will have a greater impact on aggregate demand than a tax cut that will last for only one year.   True   False

Suppose actual real GDP is $13.37 trillion, potential real GDP is $12.33 trillion, and the marginal propensity to consume is 0.62. If we ignore price effects, by how many trillions of dollars should the government change its spending to fix the gap? (Round this to two digits after the decimal and enter this value as either a positive value or a negative value without the dollar sign.)

President Biden is proposing an increase in the corporate income tax rate from 21% to 28%. Although the corporate tax rate will be higher than it is currently, it is still lower than the corporate tax rate of 35% that had been in place since President Clinton. How will this tax increase affect aggregate expenditures, equilibrium GDP and employment? Part of the reason for this proposal is to offset the increased spending from the last three stimulus packages/checks which increased Federal government's debt.  Do you agree with the proposed increase in corporate tax rates? Why or why not? What are some of the costs and benefits of the proposed tax changes? Is this the right time to increase taxes? Why or why not?

On the following graph, AD1 represents the initial aggregate demand curve in a hypothetical economy, and AS represents the initial aggregate supply curve. The economy's full-employment output is $12 trillion. On the following graph, use the grey point (star symbol) to mark the equilibrium. (Note: You will not be graded on any adjustments made to the graph.) PRICE LEVEL (CPI) AS 106 105 104 103 63 102 101 100 99 98 AD AD 吕 1 97 96 Full Employment 96 6 7 8 9 10 11 12 13 14 15 16 REAL GDP (Trillions of dollars) AD 2 Equilibrium The initial short-run equilibrium level of real GDP is $ trillion, and the initial short-run equilibrium price level is Suppose the government, seeking full employment, borrows money and increases its expenditures by the amount it believes necessary to close the

Consider the Keynesian Cross model. If the fiscal multiplier equals 2, and the government decides to increase government purchases by 100, by how much would equilibrium output increase?

Indicate how each policy in the following table would change either the aggregate demand curve or the aggregate supply curve. Policy Expansionary fiscal policy Contractionary fiscal policy Change in Aggregate Demand or Change in Aggregate Supply Demand-pull inflation Cost-push inflation

my choice is incorrect

Suppose actual real GDP is $7.87 trillion, potential real GDP is $14.36 trillion, and the marginal propensity to consume is 0.61. If we ignore price effects, by how many trillions of dollars should the government change its lump sum taxes to fix the gap? (Round this to two digits after the decimal and enter this value as either a positive value or a negative value without the dollar sign.)

Suppose actual real GDP is $9.06 trillion, potential real GDP is $6.42 trillion, and the marginal propensity to consume is 0.59. If we ignore price effects, by how many trillions of dollars should the government change its lump sum taxes to fix the gap? (Round this to two digits after the decimal and enter this value as either a positive value or a negative value without the dollar sign.)

On the following graph, AD1 represents the initial aggregate demand curve in a hypothetical economy, and AS represents the initial aggregate supply curve. The economy's full-employment output is $12 billion. On the following graph, use the grey point (star symbol) to mark the equilibrium. (Note: You will not be graded on any adjustments made to the graph.) PRICE LEVEL (CPI) 106 105 104 103 102 H AS 1ŏ1 101 ADA 100 AD 3 99 AD 2 98 AD1 97 Full Employment 96 6 7 8 9 10 11 12 13 14 15 16 REAL GDP (Billions of dollars) Equilibrium (?)