Which of the following accurately describes the phenomenon of crowding out?     government borrowing pushes up interest rates, driving out private investment and consumption     government spending drive up the budget deficit     government spending causes more goods to be allocated to the public sector and fewer are available for the private sector     Increasing the proportion of public sector spending in the composition of GDP renders production less competitive and therefore less efficient.

Q: Before the Great Depression of the 1930s, the majority of government spending took place at the and…

A: Before the Great Depression of the 1930s, the majority of government spending took place at the…

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: Explain how an increase in government spending may decrease private investment (crowding-out…

A: When government raises its expenditure on investment, it leads to a rise in the aggregate demand in…

Q: What is a budget surplus? Outline the benefits and use of a budget surplus in macroeconomic…

A: The government expenditure level and the amount of tax collection determine whether the government…

Q: If the government is running a budget surplus, net export is 0. Then: i) private saving is greater…

A: Aggregate expenditure is the sum of consumption, investment, government spending and net exports.

Q: Which of the following spending categories were in the top four largest categories of federal…

A: The issue introduced is to distinguish which of the given spending classifications were among the…

Q: Federal Government's Budget Plan for Fiscal Year ($billion)          REVENUES     OUTLAYS   Personal…

A: Budget plan refers to that plan which provides estimates of the future revenues and expenses.

Q: Voters rarely get to choose the exact level of spending on a public good. Instead, they are provided…

A: The Leviathan theory is a political theory that was developed by the English philosopher Thomas…

Q: Public deficits arise whenever government expenditure exceeds government receipts. This phenomenon…

A: Public Finance is referred to as the study of a governments activities, which includes spending,…

Q: On Friday, 27 September, 2019, the Minister of Finance, Honourable Dr. Bwalya Ng’andu, MP, presented…

A: Taxation Tax is the main source of revenue for the government of the nation. Tax is of two types…

Q: In South Africa state-owned enterprises (SOE) and labour unions are currently putting pressure on…

A: Government expenditure is important for economy. Politicians,bureaucrats,interest groups have the…

Q: One concern about the government borrowing in order to finance its projects is known as the…

A: The aggregate demand curve jn a closed economy comprises of AD = C + I + G where C = consumption, I…

Q: 000 00-50,000 00-80.000 0.9 0.8 0.75

A: Spending multiplier = 1 / 1-MPC Tax multiplier = Spending multiplier – 1

Q: An economy Is described by the following equations: C = 500 + 0.85(Y - T), Cis consumption, Y is…

A: C=500+0.85(Y-T) M=0.05(1-t)Y IP=1500 G=400 T=ty

Q: Question 4: (i) Consider an economy where government consumption is 22% of GDP, government…

A: Note:- “Since you have asked multiple question, we will solve the first question for you. If you…

Q: (1)     an increase in government spending of $100 that results in a deacrease of private investment…

A: The crowding out effect is a macroeconomic hypothesis contending that rising public area spending…

Q: If a tax rate of 1/3 of national income were introduced, what would be the new equilibrium level of…

A: C = 10 + 0.75Y  I = 20 G = 40    Now; T (taxes) = 1/3*Y or 0.33Y   Thus; C = 10 + 0.75(Y-T)

Q: A market that is operating efficiently     maximizes total surplus.     maximizes consumer…

A: A circular flow of income/money is the continuous circular flow of money and goods &…

Q: The Kenya government budget for the fiscal year 2016/2017 had the following key budgetary items…

A: Public Sector will include : Cash payments for the elderly, disabled and orphans  Salaries for…

Q: Causes of public expenditure

A: The causes of public expenditure is that the public expenditure must be done due to welfare of the…

Q: If the equilibrium GDP is 4000 billion, full employment GDP is 5000 billion, marginal prosperity to…

A: Marginal propensity to consume (MPC) = 0.80Spending multiplier = 1(1-MPC) = 1(1-0.80) = 10.2 =5…

Q: Which of the following is considered mandatory government spending? payments to Social Security…

A: Mandatory government spending programs are those that are required by law, meaning that Congress…

Q: Consider an economy with two firms and a government. Firm 1 produces 10000 units of good X, which it…

A: GDP computation through this approach requires adding up of all household income. It can be obtained…

Q: In 1968, mandatory government spending was approximately ________ of GDP and in 2108 mandatory…

A: Government spending is in the form of making expenditures on the social welfare of the society which…

Q: Definition of expenditure control measure

A: Expenditure can be defined as the payments made for the purchase of any goods or services where…

Q: Public expenditure refers to the spending by government on goods, services, and obligations. It…

A: The issue here is to distinguish the way public spending, which is spending by the government on…

Q: At any given interest rate, many major businesses become pessimistic about the future profitability…

A: Demand curve for the loanable fund shows the level of demand for loan at different interest rate.…

Q: The following set of equations describes the economy of a country A, in Africa C = 2000 + 0.75Id…

A: Macroeconomics analyzes the economy as a whole. It studies aggregate economic concepts such as…

Q: Which of the following is true of government finances? state & local government's share of total…

A: The study of the government's role in the economy is known as public government finance. It is the…

Q: Discuss the view that the best way to achieve greater equity in the distribution of income in a…

A: The concept that depicts that every income group in a nation would be having similar and a less…

Q: OilPatch is a mineral rich economy in which the government gets most of its tax revenue from oil…

A: Initially, the government introduced an income tax of $2 per hour worked.Then it doubled its income…

Q: Suppose autonomous government spending increases by $100 billion and the value of the MPC is 0.6.…

A: Formula:  Multiplier = 1/(1-MPC)  Calculate multiplier as follows:  Multiplier = 1/(1-MPC)  =…

Q: Subsidies are a part of ___________ expenditure

A: Any financial support which is presented as an incentive by the government to any sector or public…

Q: Which of the following is not a determinant of the optimal size of governmen The consumer's…

A: Various debates are taken by various economist from time to time to find the optimal size of…

Q: Higher corporate taxes, higher capital gains taxes, and higher marginal tax rates shift aggregate…

A: A charge that is being imposed by the government on the income of individuals, goods or services or…

Q: Calculate net indirect taxes if GDP at FC is $33,000 and the GDP at MP is 37,000

A: The data presented in the question above is:- GDPFC = $33,000 GDPMP = $37,000 Net indirect taxes is…

Q: Flow Injection Leakage Saving (S) Net taxes (NT) Exports (X) Investment spending (I) Government…

A: Injection in circular flow cause increase in income in flow . It includes Introduction of income.…

Q: C = 450+0.4y I = 350 G = 150 X = 70 Z = 35+0.1y T = 0.15y Yf = 1550 - Calculate the…

A: Answer: Given: C = 450+0.4y I = 350 G = 150 X = 70 Z = 35+0.1y T = 0.15y Yf = 1550 Calculation: (1).…

Q: The public consumption function of a country (a three-sector economy) is C = 60 + 0.6Yd. The…

A: The national income is the sum of consumption, investment, and government spending. It could be…

Q: The actual GDP is currently $100 billion per year and potential real GDP is currently $200 billion.…

A: Use the below formula: GDP gap = Potential GDP - Actual GDP

Q: Which of the following sources of revenue is used to fund government spending? A) corporate…

A: Government expenditure is the amount of money allocated by the public sector for the acquisition of…