ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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- Note: Solution written by hand is not permitted.arrow_forwardSuppose the marginal propensity to consume is 0.81. What is the tax multiplier? Multiple Choice 0.19 0.23 -4.26 -0.19arrow_forwardIf an increase in government spending is accompanied by a reduction in spending by firms and households, economists call this: a) Fiscal policy b) Crowding out c) The accelerator d) Hysteresisarrow_forward
- Currently many forecasters are predicting a recession for this year. What type of fiscal should the government pursue?arrow_forwardSuppose the economy is in a recession. The economy needs to expand by at least $450 billion, and the marginal propensity to consume is 0.7.What is the least amount the government can spend to overcome the $450 billion gap?______arrow_forwardQuestion 33 Expansionary fiscal policy occurs when the government increases __________, decreases __________, or both to stimulate the economy toward expansion. spending; the money supply taxes; spending the money supply; spending spending; taxes the money supply; taxes Question 34 If your marginal propensity to consume is 0.6 and you get an additional $600 in income, you would spend ______ on consumption. $200 $240 $360 $1,000 $1,500 Question 35 If a bank has a required reserve ratio of 25% and there are $5,300,000 in deposits, what is amount of required reserves? $25,000 $280,000 $1,325,000 $2,275,000 $5,005,000arrow_forward
- Which of the following is NOT a fiscal policy action? Group of answer choices decreasing government spending on the arts lowering income tax rates. raising the quantity of money in circulation increasing government expenditures on military hardwarearrow_forwardanswer quicklyarrow_forwardSuppose real GDP is currently $12.5 trillion and potential real GDP is $13 trillion. If the president and Congress increased government purchases by $500 billion, what would be the result on the economy?arrow_forward
- Which type of discretionary fiscal policy is likely to have the smallest overall effect on GDP because of the low MPC related to the policy?arrow_forwardSuppose actual real GDP is $13.74 trillion, potential real GDP is $12.69 trillion, and the marginal propensity to consume is 0.6. If we ignore price effects, and if the government already decided to increase its spending by $1.61 trillion, 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.) Correct Answer: 3.38 Please solve to get that same answerarrow_forwardSuppose the tax multiplier in an economy is -8. If the government wants to lower total spending (TS) by $8000 what should they do to Taxes (T)? Group of answer choices a. they should increase taxes by $64000 b. they should decrease taxes by $64000 c. they should increase taxes by $1000 d. they should decrease taxes by $1000arrow_forward
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