In an economy, the government wants to increase aggregate demand by $50 billion at each price level to increase real GDP and reduce unemployment. If the MPS is 0.4, then it could increase government spending by: $ billion.

How can a reduction in Corporation Tax lead to supply side improvements in an economy?

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.)

Why do Republicans like tax cuts? Why are tax cuts a good thing? How does it affect the aggregate supply and demand graph?

If the Marginal Propensity to Consume is 0.8, this means that       For each $1 increase in income, residents will increase their consumption by 20 cents.       For each $1 increase in government purchase, spending in the economy will increase by $4.00.       For each $1 increase in taxes, spending in the economy will decrease by $5.00.       For each $1 increase in taxes, spending in the economy will increase by $4.00.       For each $1 increase in taxes, spending in the economy will decrease by $4.00.

An inflationary gap is how much GDP needs to decrease from the current GDP to maintain employment while avoiding inflation. Let us say that we are experiencing an inflationary gap of $200 million.  The government decides to increase taxes.  Assume that the MPC equals .80. What will be the tax increase?

If the MPS in an economy is 0.1, government could shift the aggregate demand curve rightward by $40 billion by( please explain as well ) A) increasing government spending by $4 billion.   B) increasing government spending by $40 billion. C) decreasing taxes by $4 billion. D) increasing taxes by $4 billion.

Figure 34-8 P AD₂ Refer to Figure 34-8. An increase in taxes will AD₁ shift aggregate demand from AD, to AD3. cause movement from point A to point B along AD₁. O have no effect on aggregate demand. shift aggregate demand from AD, to AD₂. AD₂

An economy is operating with output that is $40 billion below its natural level, and fiscal policymakers want to close this recessionary gap. The central bank agrees to adjust the money supply to hold the interest rate constant, so there is no crowding out. The marginal propensity to consume is 4/5, and the price level is completely fixed in the short run. In what direction and by how much would government spending need to change to close the recessionary gap? Explain your thinking Please give me answer in daetail please

In a recession spending is Krugman (who is a Keynesian) the government should taxes and spending. less than, cut, increase more than, cut, cut more than, cut, increase 58 less than, increase, cut than the productive capacity of the economy. According to Paul government