Instructions: Enter your answer as a whole number. If you are entering a negative number include a minus sign. a. How much does aggregate demand need to change to restore the economy to its long-run equilibrium? billion b. If the MPC is 0.75, how much do taxes need to change to shift aggregate demand by the amount you found in part a? $1 Suppose instead that the MPC is 0.6. c. How much does aggregate demand and taxes need to change to restore the economy to its long-run equilibrium? Aggregate demand needs to change by $ billion billion and taxes need to change by $ billion.

Instructions: Enter your answer as a whole number. If you are entering a negative number include a minus sign. a. How much does aggregate demand need to change to restore the economy to its long-run equilibrium? billion b. If the MPC is 0.75, how much do taxes need to change to shift aggregate demand by the amount you found in part a? $1 Suppose instead that the MPC is 0.6. c. How much does aggregate demand and taxes need to change to restore the economy to its long-run equilibrium? Aggregate demand needs to change by $ billion billion and taxes need to change by $ billion.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Only typed answer
This question checks whether you understand the procedure for deriving the economy's aggregate demand curve. Think back to how this curve was derived in class. Please identify which of the following steps comes first, second, third, and fourth. First ___________ Second __________ Third ___________ Fourth ___________ Choose : O. See what level of R is implied by the monetary rule. O. Draw the Spending Curve. O. Identify the point of Spending Balance (where Y = C+1+G+ X). O. Pick an inflation rate.
Need help with this. THanks -When Government Spending increases by $10 B Aggregate Demand increases by MORE than $10 B. Which part of Aggregate Demand (C, I, G, or X?) increases so as to make this ripple effect, or multiplied impact, happen?
> A Moving to another question will save this response. 8 > » Question 18 Answer The economy is in a recession. The government enacts a policy to increase the real GDP by $10 billion. The MPS is 0.2. Assuming that the aggregate supply curve is horizontal across the range of GDP being considered, by how much should the government change spending or taxes in order to achieve its objective? Show your calculations., For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). E vE v 面 A v ... BIUS Paragraph Times New R. v 12pt POWERED BY TINY >
An economy is operating with output that is $40 billion below its natural level. And fiscal policy makers 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 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.
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.
When Government Spending increases by $10 Billion Aggregate Demand increases by MORE than $10 Billion. Which part of Aggregate Demand increases so as to make this ripple effect, or multiplied impact, happen?
Just solve questions 41-44, thank u! 30.A surplus of product will occur when price is: above equilibrium with the result that quantity demanded exceeds quantity supplied above equilibrium with the result that quantity supplied exceeds quantity demanded below equilibrium with the result that quantity demanded exceeds quantity supplied below equilibrium with the result that quantity supplied exceeds quantity demanded 31.Which of the following would decrease aggregate demand and shift the AD curve to the left? a decline in personal income tax rates a decline in consumer spending a higher level of government purchases a fall in interest rates 32.Which of the following is an implicit cost to the Johnston Manufacturing Company? payments of wages to its office workers property taxes rent paid for the use of equipment owned by the Schultz Machinery Company returns that the shareholders could have received if they had not bought shares in the Johnson Manufacturing Company…
Which fiscal policy will increase aggregate supply? increasing tax rates on businesses O increasing tax rates on consumers instituting more regulations on businesses allocating more money for federal student loans
In 2006, the U.S. economy experienced an inflationary gap when the economy was booming and the unemployment rate was low. Would you consider a tax increase in that period to be demand-side focused, supply-side focused or both? What would be the impact of this policy on the price level and the real GDP? Explain.
how a decrease in government spending on infrastructure affect the aggregate demand curve?
In February 2021, retail sales fell by 3.3% compared to January. What does the drop in retail sales indicate about how consumption has changed? Investment spending fell by 2.2% in February. How will these changes affect aggregate expenditures? How will equilibrium GDP be affected? How do you think the stimulus checks that many Americans will receive will affect consumption? How will that affect aggregate expenditures and GDP and employment? Do you expect the change in aggregate expenditures be temporary or permanent? Part of the stimulus package passed by Biden includes an extra $300 per week in unemployment benefits. Do you agree with the stimulus checks and additional $300 per week in unemployment benefits? Why or why not?