In 2001, the Bush Administration increased spending by $100 billion and raised taxes by $70 billion at the same time. It’s likely that: A. interest rates will most likely not increase. B. interest rates will most likely increase. C. business investment is not likely to change. D. business investment is likely to increase due to crowding out

Suppose there were an increase in Government spending of $100 billion. The MPC is 75 andthe tax rate is 2. No. imports a. What is the net impact on the economy if the crowding out effect is equal to $20 billion?b. What if the crowding out effect is $60 billion7c. Which of the two scenarios corresponds to the reaction of an economy which is closer to fullemployment? Explain

28. Which of the following policies might provide a remedy when the equilibrium output in an economy is above the potential level of output? a. Increase government spending. b. Decrease the federal funds rate. c. Increase transfer payments. d. Raise taxes. e. Buy more government securities.

None

Consider the following picture. c' A D B E F Suppose that the government changes government spending: it increases G and decreases G', but leaves T and T' unchanged. The interest rates in the economy are also unchanged. What happens to the budget line of the consumer? O It expands to the right: the consumer will be able to consume more in the present, and less in the future It contracts to the left: the consumer will be able to consume less in the present, and more in the future O It's unchanged O Impossible to tell!

The graph below shows, the aggregate demand and supply for the economy of Etrusca. a. Draw AD2 on the graph below assuming an increase of $60 in aggregate demand. Plot only the endpoints of the curve below b. What is the new level of equilibrium GDP? c. What is the new equilibrium price level? d. How much is the reduction in GDP due to the crowding out effect?

In 2010, the country of Lykesville had a balance budget, no debt, and its GDP was $31500. In 2011, it spent $11500 and had $100000 in tax revenue, and its GDP in creased to $37500. In 2012, it spent $13500 and had $13000 in tax revenue, and its GDP further increased to $37500. Did Lykesville runa  budget deficit or budget surplus in 2012? What was Lykesville's Debt-GDP ration, expressed as a % at the end of 2012?

What happens if there is an increase in the budget deficit? O O Raise the real Interest rate and decline the quantity of loanable funds demanded for Investment Lower the real Interest rate and decrease the quantity of loanable funds demanded for Investment. Lower the real Interest rate and increase the quantity of loanable funds demanded for Investment. Raise the real Interest rate and increase the quantity of loanable funds demanded for Investment. Reset Answer

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If Congress wanted to help the economy out of a recession, they would be most likely to: check all that apply increase interest rates reduce government spending O increase transfer payments O decrease taxes