Government spending (as a percentage of gross domestic expenditure) has increased significantly over the past decades. Explain any two reasons for this trend.

Q: suppose the government wishes to illuminate recessionary of a gdp of 100 billion in the MPC is .075.…

A: To calculate increase in government spending we have to first calculate the spending multiplier.

Q: Fiscal policy is conducted by the government and aims at boosting the economy; which of the…

A: The economies around the world have various entities, which are considered to be decision makers,…

Q: By how much will GDP change

A: Government spending multiplier formula  ∆Y/∆G = 1/1-MPC ∆Y = 1/1-MPC × ∆G ∆Y = 1/1-0.80 × 10  ∆Y =…

Q: If Government Spending (G) is $200 million, Tax Revenue (T) is $260 million, Consumption is $ 300…

A: GDP by the expenditure approach is the sum total of all the expenditures by all the sector in the…

Q: Hello. Can you please assist on the following question .. Q.1. Identify various Injections and…

A: Answer: Leakages: Leakages refers to the withdrawal of money from the circular flow of income. For…

Q: Assume you are the Minister of Finance and Economic Planning for Ghana, in charge of Fiscal Policy.…

A: Let us firstly define the data provided - Saving rate = 20% , therefore , Consumption rate /MPC = 1…

Q: Analyse how the level and pattern of household spending may change when GDP decreases

A: Gross Domestic Product (GDP) is the value of final goods and services produced in the domestic…

Q: Why is a $100 billion increase in government spending on goods and services more expansionary than a…

A: According to the aggregate expenditure model Total income (Y) = Consumption (c +b(Y-Taxes) +…

Q: The table given below reports the value of real GDP and its components consumption (C), investment…

A: Real GDP is the money value of all final goods and services produced in an economy during a specific…

Q: Assume you are the Minister of Finance and Economic Planning for Ghana, in charge of Fiscal Policy.…

A: The fiscal stance of a government alludes to what its level of expenditure and tax collection means…

Q: Under which condition the fiscal policy has the maximum effect on real national income? Sketch graph…

A: Fiscal policy, measures used by governments to stabilize the economy, specifically by manipulating…

Q: The relationship between changes in spending and Real GDP without price increase is: a. Economic…

A: Real GDP is the value of goods and services produced in the economy in a given time period excluding…

Q: Explain, using appropriate diagrams, how a rise in the household saving rate can cause a fall in…

A: GDP is the value of final goods and services produced in the country within a given period of time.

Q: Assume the Philippines government adopted fiscal policy measures to reduce the severety of typhoon…

A: Typhoon Haiyan, also known as Super Typhoon Yolanda in the Philippines, was one of the most intense…

Q: Analyse the action that government can take to assist the economy during a recession

A: Meaning of Macroeconomics: The term macroeconomics refers to the situation of economic and…

Q: The government of a country decides to double its current level of spending, causing real GDP to…

A: Gross domestic product (GDP): - GDP is the market value of all final goods and services produced in…

Q: Fiscal policy of increasing government expenditures can be more potent than monetary policy in…

A: Fiscal policy works through changes in government expenditures and changes in taxes, while monetary…

Q: An example of a fiscal policy designed to increase real GDP is a. a cut in taxes. b. an increase in…

A: Fiscal policies are designed to influence the aggregate demand, which further leads to affect the…

Q: If MPC = .5, a simultaneous increase in both taxes and worthless government spending of $20 will:…

A: The balanced-budget multiplier is equal to 1 in this case . When the government increases spending…

Q: Suppose the government seeks to achieve a balanced budget by levying taxes of $50 billion and making…

A: If MPC=0.8 then  MPS=1-MPC MPS=1-0.8 MPS=0.2

Q: Suppose equilibrium GDP is less than full-employment output and the economy is in a recession. What…

A: If the economy is in a slump and equilibrium GDP is below full employment, the government's goal…

Q: Which of the following is used as a remedial measure during a recession in an economy? a. Decrease…

A: A recession refers to a period of economic slowdown. The recession is characterized by low levels of…

Q: Assume you are the Minister of Finance and Economic Planning for Ghana, in charge of Fiscal Policy.…

A: Given information MPS=0.20 Autonomous consumption=5000 Investment=7000 G=8000 T=2000 t=0.25…

Q: Definition of expenditure control measure

A: Expenditure can be defined as the payments made for the purchase of any goods or services where…

Q: How to calculate the level of GDP base on the MPC & MPS? Historical durations of recessions? The…

A: Hi, As you have posted multiple questions, we will answer the first one as per our policy. KIndly…

Q: In 2005 national government spending is $4.00 trillion and tax collections are $4.00 trillion. This…

A: Budget refers to the amount of money that the government of a nation has, which it intends to spend…

Q: Expenditures that would exist at a zero level of income are called induced expenditures:  True or…

A: There are two types of expenditure : Induced expenditure and Autonomous expenditure  Induced…

Q: Explain the items of Government Expenditures in details

A: The aggregate expenditures refer to the total expenditures made by all the entities in an economy.…

Q: Determine the net impact upon the nation's economy that results from equal increases in government…

A: Change in Y = [{1/ (1-MPC)}* change in G] – [{MPC/ (1-MPC)}]* change in T                      =…

Q: The American Recovery and Reinvestment Act of 2009 included mostly increases in taxes and…

A: The American Recovery and Reinvestment Act of 2009, also known as the recovery act, was a package…

Q: Given a full employment level of GDP of 700 Trillion and a current level of 670 Trillion the…

A: Full employment level refers to a situation as described by the classical economists that all the…

Q: In order to boost the economy, the government should implement expansionary fiscal policy by…

A: Fiscal policy is the tool used by government to achieve the objectives of economy such as economic…

Q: Please answer the question below: If the current real GDP is P700 billion, which of the following…

A: MPC = 0.8 Potential output = P800 billion Real GDP = P700 billion

Q: Should the government fight recessions with spending hikes rather than tax cuts ? Explain

A: Government spending and tax reductions have different multiplying effects on the economy.

Q: Choose... Choose.. Decrease in government expenditure Increase government expenditure Decrease in…

A: Fiscal policy involves the use of tax and government spending to influence the economy. Autonomous…

Q: MPC is 0.875. When tax increases by $1, GDP will decrease by $8. by $1, GDP will decrease by $7. by…

A: MPC = 0.875 Using the Tax multiplier formula

Q: Why does a $100 billion dollar increase in government spending increase output by more than $100…

A: The multiplier indicates that the number of times income increases by increasing government…

Q: Which of the following is an expansionary fiscal policy? increase in taxes only both increase in…

A: Fiscal policy is the term used to describe how the government uses spending and taxation to affect…

Q: If MPC = 0.5, a simultaneous increase in both taxes and government spending of $20 will a. decrease…

A: The pending multiplier denotes the ratio of change in the real GDP to the change in the initial…

Q: _________________ Are those expenditure of the government which neither cause any increase in the…

A: According to the given question Expenditures as usually known as the initial act of spending time or…

Q: The impact of an increase in government spending would be to a) increase the interest rate b) leave…

A: Government spending is spending on infrastructure, roads and highways, national defense and…

Q: Our economist estimate that citizens in our country have an MPC of 0.90. To increase GDP by $1,000,…

A: GIVEN DATA   Our economist estimate that citizens in our country have an   MPC of 0.90.   To…

Price Ceilings and Price Floors

Price Ceilings and Price Floors strategy is used by the Government to control the prices of certain goods and services in the market. This method helps the Government to protect the interests of both buyers and suppliers in difficult economic times.