ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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- Questions:4. what is the government's current budget balance?billions of dollarsarrow_forwardAnswer the questions below for the economy of Motak using the graph below. Government spending / net taxes 400 350 300 250 200 150 100 50 0 The Economy of Motak 200 400 600 800 1000 1200 1400 Real GDP INTR G1 Tools G₂ 2arrow_forwardAnswer exercises 11-14 on the basis of the following information. Assume that equilibrium real GDP is $800 billion, potential real GDP is $950 billion, the MPC is .80, and the MPI is .40.arrow_forward
- Consider an economy with the following situation: C = 50 +0.8 Yd I=100;T= 100 G =150 a. To eliminate the gap, the government decides to change its expenditure G. By how much should G change? Show that income AE or Ye is now 900 after the change in G. b. If the government decides to adopt balanced budget spending, by how much G and T will change to reach full employment output or income?arrow_forwardPlease solve step by step and quickarrow_forwardUse the following equations for exercises C = $ 100 + .8 Y I = $ 200 G = $ 250 X = $100 - .2 Y a.What is the equilibrium level of real GDP? b.What is the new equilibrium level of real GDP if government spending increases by $ 150? c.What is the new equilibrium level of real GDP if government spending and taxes both increases by $ 150?arrow_forward
- 3. What is fiscal equalization? Give an examplearrow_forwardGovernment spending in Robok is $140 billion, and its only tax is an income tax with a marginal tax rate of 0.2. a. The balance on the government's budget at a GDP level of $450 billion is a (Click to select) : of $ billion. b. The balance on the government's budget at a GDP level of $800 billion is a ( (Click to select) : of $ billion. C. At what level of GDP will the economy of Robok have a balanced budget? Robok will have a balanced budget at a GDP level of $ [ ]billion.arrow_forwardW, J, E The following diagram illustrates an economy where its current level of GDP (i.e. national income, Y) is Ye. E 0 YF Assume that the government wishes to use fiscal policy to achieve the full-employment.level of GDP (YF). It could decrease government expenditure by fd. increase government expenditure by YF - Ye. decrease government expenditure by YF - Ye. increase government expenditure by fd.arrow_forward
- G Spending and NTR Budget Deficit Budget Surplus Y1 V1 . I I Y2 V2 je I I Y3 I V3 G NTR Real GDP BL Real GDP In the following graph, NTR is net tax revenue, G is government spending on goods and services, BL is budget line. Which of the following is true? A balanced budget would occur at income level Y1 A balanced budget would occur at income level Y2 A balanced budget could occur at income levels Y1, Y2 or Y3 The existence of a balanced budget cannot be determined because no inflation on tex revenues is givenarrow_forwardSuppose the government, in an effort to avoid an increase in the deficit, votes for a budget neutral tax cut policy. Assume the marginal propensity to consume (MPC) is equal to 0.75 and taxes are cut by $15 billion. Round answers to the nearest billion, and specify decreases as a negative number. By how much will government spending change? change in government spending: $ What is the resulting change in the equilibrium level of real GDP? change in equilibrium level of real GDP: $ billion billionarrow_forwardSolve all questions compulsory......arrow_forward
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