The economy of Bananaland can be characterized by Equation 9.3.                  EQUATION 9.3:                  C = 2,000 + 0.75Yd                 T = 200                 G = 400                 I = 500 Calculate the government spending multiplier

Pundits have stated that the recent tax cut mainly benefits companies. The benefit to companies can also spillover to consumers in several ways. Which of the following actions as a result of the tax cut will benefit consumers?     tax cut results in more investment expenditures by firms   tax cuts raise stock market values   tax cuts result in an increase in the capital stock   all of the above

Which of the following is NOT a way for governments to increase FDI? Increase value-added taxes or consumption taxes on domestically produced goods. Improving domestic infrastructure. Provide financial incentives to foreign entities looking to invest in the country. Investing in education to improve domestic workforce quality.

Question 21.21  Which of the following goods (with their respective income-elasticity coefficients in parentheses) will most likely suffer a decline in demand during a recession?         Dinner at a nice restaurant (+1.8)        Chicken purchased at the grocery store for preparation at home (+0.25)        Facial tissue (+0.6)        Plasma-screen and LCD TVs (+4.2)

Calculate the value of MPS when the value of MPC is 0.13

In the country of Krugman, a business spent $100 million building a factory. GDP eventually increased by 200 million. People spend 11% of every dollar on imports. What is the marginal propensity to consume in this economy? Write your answer as a number, between 0 and 1. If you think the answer is 0, write 0.00, not 0. Answer: Study the graph below. When will the multiplier be biggest? Select one: The multiplier will be the same size no matter what Aggregate Demand is b. The multiplier will be one no matter what aggregate demand is When aggregate demand is at AD1 d. When aggregate demand is at AD3 e When aggregate demand is at AD2 Price Level AD₁ AS e All of these are true AD₂ AD₁ GDP Why is potential output called potential, when it is not actually the most the economy can produce? Select one: a. Because potential is the most the economy can produce right now, with the technology and workers and equipment we have right now. Ob. Because economists just like to be confusing for no reason…

The table below shows the parameters for the economy of Hutu. C = 70 + 0.6Y XN = 150 - 0.1Y I = 140 G = 240 a. The value of equilibrium income is $ b. If exports were to increase by 90, the new value of equilibrium income would be $ C. Given your answer in part (b), the new value for XN is $ d. Given the equilibrium income in part (a), if full employment income is $925, what change in government spending is necessary to move the economy to this level? Government spending needs to (Click to select) v by $ Next > 18 of 33 < Prev

In the country of Borealis, the minimum amount of consumption spending that will occur is $300 - that is, no matter what level of income households have, the aggregate amount of consumption spending in the economy will be at least $300. In addition, for every extra dollar of national income, consumption spending will increase by $0.75.

Categorize each flow in the following table as either an injection into the circular flow or a leakage from the circular flow.

Consider a hypothetical economy in which households spend $0.50 of each additional dollar they earn and save the remaining $0.50. The following graph shows the economy's initial aggregate demand curve (AD1). Suppose the government increases its purchases by $2 billion. Use the green line (triangle symbol) on the following graph to show the aggregate demand curve (AD2) after the multiplier effect takes place. Hint: Be sure the new aggregate demand curve (AD2) is parallel to AD1. You can see the slope of AD1 by selecting it on the following graph. 114 152 110 100 100 104 102 150 100 102 104 108 108 110 112 114 110 OUTPUT( 30 41 The following graph shows the money market in equilibrium at an interest rate of 1.5% and a quantity of money equal to $45 billion. SINNTEKIN Show the impact of the increase in government purchases on the interest rate by shifting one or both of the curves on the following graph. as 0 D 15 Money 30 MONEY Mordy Domene 45 00 of d A AD₂ 75 Ⓒ a Money Damen Many Sy (?)…