If the MPC in an economy is .8, government could shift the aggregate demand curve rightward by $100 billion by: increasing government spending by $25 billion. increasing government spending by $80 billion. decreasing taxes by $25 billion. decreasing taxes by $100 billion.

Q: Explain and show the consequence for fiscal policy if the marginal propensity to consume is a…

A: Fiscal policies are the public authority made approaches made to control, fortify and support the…

Q: If the MPC in an economy is .8, government could close a recessionary expenditure gap of $200…

A: Answer: Given, MPC (Marginal Propensity to consume) = 0.8 Recessionary Expenditure Gap= $200 To find…

Q: real GDP = (Change in Taxes) X Change in equilibrium (Tax Multiplier) Change in equilibrium real GDP…

A: Initial change in the tax or investment causes multiple change in final income. The value of…

Q: Expansionary fiscal policy occurs when the government decreases spending or increases taxes to…

A: Fiscal policy is the tool used by government to control the economy.

Q: 1) Under which of the following scenarios would an expansionary fiscal policy be more effective?…

A: In an economy, expansionary fiscal policy refers to the situation when government tries to increase…

Q: The economy is described by the following functions: Shown in Picture where ?t is the tax rate.…

A: Multiplier associated with government purchases is the total change in income with change in…

Q: If the tax multiplier is -5 and taxes are reduced by $200 billion, output falls by $1000 billion.…

A: Given Tax multiplier = -5 Reduction in Taxes = 200 Billion$ with reduction in taxes there is…

Q: Suppose that real GDP for an economy is currently 16,000 billion, the government purchases…

A: Fiscal policy refers to the actions taken by the government to intefere in the economic activity and…

Q: Suppose the MPC is 0.8 and the crowding out effect is $30 billion. The government aims to increase…

A: Gross domestic product (GDP) is the standard measure of the value added created through the…

Q: 000 00-50,000 00-80.000 0.9 0.8 0.75

A: Spending multiplier = 1 / 1-MPC Tax multiplier = Spending multiplier – 1

Q: Suppose the government enacts a stimulus program composed of $400 billion of new government spending…

A: It is given that the government increases government spending by $400 billion and it is also given…

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: + Home-mySandburg Search the web Course: Fall 2024 Intro to Econ X MindTap-Cengage Learning X +…

A: The problem is asking us to calculate the increase in consumption for both Chinos and Pistachios.…

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: If there is a recessionary gap of $200 Billion and the MPC is .9, how much would government spending…

A: Hi. Since there are two questions, we will solve only the first one. 9. Recessionary gap is given by…

Q: If the MPC is 0.4, the MPI is 0.2, and the government increases spending by $50 million, what will…

A: Marginal Propensity to Consume, is a measure in economics that indicates the proportion of an…

Q: Suppose that the government decreases its autonomous spending by $100 billion and also decreases its…

A: Gross domestic product is the sum of a country's final goods and services. The increase in GDP…

Q: Expansionary fiscal policy will: a shift the aggregate demand curve left. b shift the aggregate…

A: Fiscal Policy refers to the policy that the government undertakes to either increase economic growth…

Q: Ceteris paribus, if the AD shortfall equals $600 billion, then the federal government can close it…

A: "AD shortfall" refers to an Aggregate Demand deficiency in the economy, indicating that the current…

Q: In 1968, mandatory government spending was approximately ________ of GDP and in 2108 mandatory…

A: Government spending is in the form of making expenditures on the social welfare of the society which…

Q: Suppose that the MPC is 0.8 and that $18 trillion of real GDP is currently being demanded. The…

A: GDP: It means the monetray value of finished goods and services that are produced in the country.

Q: If the MPC is​ .75, the government spending multiplier is

A: The government spending multiplier is the amount by which a change in government spending affects…

Q: Right now many economies in the world are experiencing a downturn due to the Corona Virus. a) What…

A: Hello, thank you for the question. Since there are multiple subpart questions posted here, only the…

Q: If the MPS in an economy is 0.25. government could shift the aggregate demand curve rightward by $64…

A: Here, it is given that the MPS is 0.25 and government wants to increase aggregate demand by $64…

Q: If the MPC in an economy is 0.7, the government could shift the aggregate demand curve rightward by…

A: The marginal propensity to consume (MPC) is defined as the proportion of an aggregate raise in pay…

Q: In a depressed economy with an MPC of 0.20, what effect will a $200 increase in government spending…

A: Consumption is the sum of autonomous consumption and consumption dependent on income. Disposable…

Q: Suppose the following list of events describes all of the economic activity resulting from an…

A: Economic activity encompasses the entirety of exchanges concerning the creation, dissemination, and…

Q: Which of the following would be most likely to induce Congress and the president to conduct…

A: Fiscal policy refers to the policy under which the state or government uses instruments such as…

Q: f an increase in government spending is accompanied by a reduction in spending by firms and…

A: The GDP or the gross domestic product is defined as the value of all final goods and services newly…

Q: Given MPC (marginal propensity to consume) = 0.75, if the government implements an expansionary…

A: MPC = 0.75  Tax multiplier = (-MPC/1-MPC) Tax multiplier= (-0.75/1-0.75)Tax multiplier=…

Q: Automatic stabilizers   a)increase consumption during a recession above what it would otherwise be…

A: Automatic stabilizers work to maintain the equilibrium in the economy.  Too much of inflation or…

Q: Assume that an economy with an MPC of 0.8 is experiencing a recessionary gap of $25 billion. The…

A: The marginal propensity to consume (MPC) is a crucial idea in macroeconomics because it assesses an…

Q: Which of the following accurately describes the phenomenon of crowding out?     government…

A: Aggregate demand is composed of consumption spending, investment spending, government purchases and…

Q: Expansionary fiscal policy refers to (increases, decreases) in government spending or ases,…

A: In expansionary fiscal policy, government cuts tax rates(income tax & corporate tax) and boost…

Q: Expansionary fiscal policy occurs when the government increases __________, decreases __________, or…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: If the government increased spending by $8 million as part of expansionary fiscal policy, calculate…

A: MPC is the marginal propensity to consume, which is the proportion of change in income spent on…

Q: Classify the actions as either discretionary spending or an automatic stabilizer. Place each action…

A:

Q: government spending multipliers are larger than tax multipliers and politicians can direct…

A: First we have to look at the equation for the Simple-Keynesian-Model. Y=C(Y-T)+I+G Where-Y is the…

Q: Suppose the tax multiplier in an economy is -8. If the government wants to lower total spending (TS)…

A: The tax multiplier shows the effect of any change in taxes on the aggregate demand of the economy.…

Q: The marginal propensity to consume out of permanent income equals 0.9 and the marginal propensity to…

A: Economic analysis is the process of evaluating data and patterns to better understand economic…

Q: Which is considered expansionary fiscal policy? a)a tax increase for wealthy individuals b)an…

A: Fiscal Policy is  the use of tax policy and the government expenditure that can influence the…