Mathematically prove that balanced budget multiplier is one. Interpret it

Q: In Hofstralia, initially nobody is defaulting on their loan, and the government is running a…

A: A balanced budget is said to have occurred when the income of the government is exactly equal to the…

Q: If you make $800 from a lucrative side business selling snack food in dorms, how much would you save…

A: Given  Total Earning = $800 MPC = 0.75 We know that  MPS + MPC = 1 Where MPS is Marginal propensity…

Q: Suppose that out of the original 100 increase in government spending, 33 will be recycled back into…

A: The circular flow of income illustrates the ongoing circulation of funds in the economy. Firms…

Q: When the MPC increases: a. the government spending multiplier stays the same b. the government…

A: The marginal propensity to consume refers to that portion of the increased income that was spent by…

Q: If the income level is 120 and total savings for that level is 40 find the average propensity to…

A:

Q: Which types of budget cuts only reduce areas that have overspending? Group of answer choices…

A: Budgets refers to the preparation of the spending plans based on the income. Budgets are prepared by…

Q: How will the deficit for the bottom line budget of $3.1 trillion affect the economy?

A: The budget deficit would result in the increase of the government expenditures over the revenues.…

Q: Monica's current income went up from $100.000 to $105,000 and she increased her current

A: Given that, Monica's current income went up from $100,000 to $105,000  Her change in income =…

Q: The average propensity to consume of a person is 0.6 and the marginal tax to consume is also 0.6.…

A: Average propensity to consume (APC) = 0.6 Average propensity to save (APS) = ?

Q: an increase in MPC, reduces the multiplier? true or fulse

A: The marginal propensity to consume is the concept which explains the increase in the consumption…

Q: Suppose when Sue's disposable income is $10,000, she spends $8,000, and when her disposable income…

A: The income and spending pattern of the consumer is given as follows. Disposable incomeConsumption…

Q: Assuming you are the Minister of Finance and Economic Planning for Nigeria, in charge of Fiscal…

A: Given informationMPS=0.20Autonomous…

Q: how do multipliers affect the outcomes?

A: In economics, changes or fluctuation in market variables may affect the final outcome obtained by…

Q: If you make $800 from a lucrative side business selling snack food in dorms, how much would you save…

A: The marginal propensity to consume is a statistic in economics that quantifies induced consumption…

Q: roup of answer choices As marginal propensity to consume (b) decreases, the spending multiplier…

A: Change in consumption following change in income is called marginal propensity to consumer.

Q: Assume there are 2 people Xavier with a Marginal propensity to consume (MPC) of 80% and Francis with…

A: Hello. Since your question has multiple sub-parts, we will solve first three sub-parts for you. If…

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: Average propensity to save is given as 0.5  Income is $900  Calculate the savings

A: # The ratio of Savings to Income is Average propensity to save.

Q: How will the revenues for the bottom line with a budget of $3.4 trillion affect our economy?

A: Answer - Need to find- How will the revenues for the bottom line with a budget of $3.4 trillion…

Q: The economist views the budget as a public policy making tool? True or false

A: False. Reason- Economists view the budget as the opportunity cost. They see budget as the…

Q: Describe the following term in your own words. Balanced budget

A: Budget shows the total receipts(income) and total expenditure of the government in a fixed period of…

Q: Background: Between 2002 and 2003, the United States government increased its purchases on military…

A: The multiplier effect is calculated by taking the ratio of change in an exogenous variable and…

Q: If MPC Is 0.5 so what is MPS ( define as well)

A: A person's disposable income is divided into two parts: consumption and saving. Savings are also…

Q: Q1 4. Suppose you earn same income as one of your cousins but expect to live longer than your…

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

Q: Please place these budget process steps in order from first to last: Systematic audits are conducted…

A: Budget refers to the process of making a detailed plan for distribution of funds and resources over…

Q: The value of multiplier is 1.35 Calculate the value of Marginal propensity to save

A: The inverse of Marginal propensity to save gives the value of multiplier.  k = 1/MPS

Q: Suppose the economy goes Int more while businesses wish to invest less. Suppose that at the same…

A: Recession refers to the contraction time period of the economy when there is a downturn phase. It…

Q: When price level is considered, the value of the multiplier will be less than that suggested by the…

A: The over simplified formula of the multiplier is, Multiplier = 1 / (1-MPC) , where MPC is the…

Q: Why does the budget require a forecast of the economy? Under what circumstances would actual…

A: A budget is a financial document or the financial plan of an economy which includes the planned…

Q: If the value of MPC is 0.8, find the value of multiplier.

A: Multiplier refers to a proportionality factor that ascertains the level of change that an…

Q: Increasing government purchases of goods and services would have a bigger multiplier effect on real…

A: Marginal Propensity to Consume (MPC):The MPC is how much of each dollar we expect an individual or…

Q: If the government spends 10 million and the multiplier is 5, then real GDP will increase by: Group…

A: If the government spending = 10 million Multiplier = 5 Then government spending multiplier is…

Q: the largest category of the federal budget outlays is from

A: The federal budget outlays refer to the total amount of money that the federal government plans to…

Q: hon was given a $2000 stimulus check. He will spend 75% of his money(which is 1500$). The next…

A: Multiplier refers to the number of times the national income increases due to an initial increase in…

Q: Does a balanced budget multiplier of one suggests that the government can stimulate economic growth…

A: The Government stimulates economic growth without changing the size of the budget deficit or surplus…

Q: If the MPC = 3/5, then the government purchases multiplier is 5/3 5/2 5 1.5

A: Marginal propensity to consume is the proportion of the additional income used for the consumption…