Mathematically prove that balanced budget multiplier is one. Interpret it

What happens to the real GDP if the government increases spending by $50 million and the government multiplier is 1.5?

Show that if the multiplier is one, the slope of the savings schedule is one.

What would be the value of Marginal propensity to save when the multiplier is given as 7.9

a) Write the equation representing snapshot of budget and Indicate the status of the budget as having a surplus or deficit, or balanced at Zero and explain why? How is this budget expected to affect the GDP? Explain! (b) Use the lump-sum tax and the MPC to calculate the decrease in consumption due to this lump sum tax (show all your calculations); then use the change in consumption you just obtained to find the consumption after tax (ca-fill in the column 7 below). (c) Use the Ca to find the (after-tax) aggregate expenditures for the 4-sector private-public-open economy (AEa) and fill in the column 8; Now use the column 1 and column 8 to find the new equilibrium GDP and DI in the 4-sector model. (d) Has GDP increased in the 4-sector compared with those in the previous 3-sector equilibrium? If so, by how much? What is the effective multiplier from 3-sector to 4-sector and why? Explain. (e) Has DI changed from 3-sector to 4-sector? Why/why not? How about consumption and savings? Explain…

If consumers spend 90 cents out of every extra dollar received, the A) MPS is 0.10 B) MPC is 0.90 C) Multiplier is 10 D) All of the above

In Hofstralia, initially nobody is defaulting on their loan, and the government is running a balanced budget in every period. Joe is a borrower. Draw Joe’s intertemporal budget constraint, use an indifference curve to show his optimal consumption bundle, and place an endowment point (and show its coordinates) on his budget constraint consistent with the fact that he is a borrower. Suppose that the government is eliminates taxes in the current period, and finances its spending through a deficit. Show graphically how the tax cut would affect Joe’s borrowing, and explain what would happen to his consumption and welfare. Would the Ricardian equivalence hold? Why or why not? Suppose now that due to a recession people start losing their jobs. Banks expect some borrowers to default but because of asymmetric information, they do not know which ones. Explain how interest rate on loans would change and why. Show on the graph and explain how events in the financial market would affect Joe’s…

If the marginal propensity to consume is then the government spending multiplier is 3. True O False

Income Expenditures 0 100 100 150 200 200 300 250 Refer to the table above to answer the following: (a) At an income level of $200, how much is autonomous expenditures and how much is induced? (b) Given the expenditures function AE = $4,000 + 0.6Y and income of $1,000, how much is spent and how much is induced?

why does the budget require a forecast of the economy? under what circumstances would actual government spending and tax revenue fail to match the budget as approved?