Continuing the situation in the above question (i.e. suppose the economy begins in a long-run equlibrium at potential output when the government decides to alter spe and/or taxes to make the budget deficit smaller). What would be the long-run impact of this action? 000 unemployment and investment spending are unchanged unemployment is higher and investment spending is unchanged Unemployment is unchanged, but there is more investment spending unemployment is higher and there is less investment spending

please include graphs

Q: "Introducing Keynesian Economics" says that Keynes A: - wanted social revolution just like Marx - aggregrate supply is determined by the level of aggregrate demand, the level of aggregrate demand deternines level of employment  - aggregrate supply determines aggregrate demand and the market always gives full-employment equilibrium  - all of the above

With reference to an Injections and Withdrawals diagram. If this diagram is illustrating a Recessionary Gap. Using Macroeconomic terms explain what this diagram is outlining and what measures a Government may take to correct this economic situation, and why Government may take these actions. You may wish to include a brief analysis relating to current macroeconomic issues

hello, so ive already asked this question but i dont understant the answer that i was given. This is what I have so far: true or false: "tax cuts directed at higher income individuals will do more to stimulate the economy than those directed to lower income individuals, in the keynesian model." my reasoning with this is that its true? can you explain this to me? wouldnt the economy be stimulated more if it was given to a lower income individual because they are most likely to spend it?  ANSWER I WAS GIVEN: Step 1 According to Keynes, the economy will be an unstoppable machine operating at maximum capacity if people did not save something. To allow people to spend more, Keynesians suggested tax savings. The Keynesian model, established by British economist John Maynard Keynes portraying savings as a drain on the economy and thus making deficit spending appear superior. However, unless someone keeps all of his or her savings in cash, which is unusual, savings are invested, either by…

Consider the following diagram, in which the current short-run equilibrium is at point A. At point A, the economy has If the marginal propensity to save equals 0.20, calculate the change in government spending that could eliminate the gap. S trillion. (Round your answer to two decimal places.) CO Price Level 40 120 115 111 0 LRAS 22 22.5 23 Real GDP per Year ($ trillion) SRA AD

Question 13 Include correctly labeled diagrams, if useful or required, In explaining your answers. A correctly labeled dl question prompts you to 'Calculate," you must show how you arrived at your final answer. Vander's economy is in short-run equilibrium with an inflationary gap of $360 billion, and the marginal propensity to save 0.1. the expected inflation rate is 2% and the natural rate of unemployment is 4% (b) Assume the government takes no policy action with regard to the state of Vander's economy. (i) What will happen to the actual rate of unemployment in the long run? Explain.(it) The flow will the long-run adjustment process be represented in the Phillips curve model? Explain. (c) Assume that instead of waiting for the long-run adjustment, the government of Vander is considering USA fiscal policy to addresses the inflationary gap of 360 billion(ii) How will the effect of the government's action in part (c)(i) be represented in the Phillips curve model(Ili) If the government…

5

Suppose that the government reduces the lump-sum tax, and suppose that gov- ernment always has a balanced budget: G = T. Using a diagram, describe and explain the effects of this policy on aggregate output, consumption, employment (or hours worked), and the real wage (note: show the effects on a graph with the production possibilities frontier and indifference curves).

What type of output gap occurs when the economy is below full employment? The economy is below full employment. Draw the aggregate demand curve. Label it AD. Draw a point at the equilibrium. C 140- 130- Price level (GDP price index, 2012-100) 120- 110- 100- 90- 90 80- 18.0 Potential GDP AS ☑ 18.5 19.0 19.5 20.0 20.5 21.0 21.5 22.0 Real GDP (trillions of 2012 dollars) >>> Draw only the objects specified in the question.