Which of the following is not a valid point in debating the merits of increasing government expenditures or cutting taxes during a recession? a. A cut in the marginal tax rate increases the incentives to find a job and work longer hours. b. Consumers will save a portion of a tax cut. c. The government may use the increase in expenditures on projects with little value, particularly, if it wishes to respond quickly. d. There is no evidence that tax cuts have been followed by increases in economic growth.

Please answer the question below: If the current real GDP is P700 billion, which of the following policies would bring the economy to potential output? a. increase government spending by P25 billion b. increase government spending by P100 billion c. increase government spending by P20 billion d. decrease government spending by P100 billion   If current real GDP is P700 billion, which of the following policies would bring the economy to potential output? a. decrease taxes by P100 billion b. increase taxes by P100 billion c. decrease taxes by P25 billion d. increase taxes by P25 billion * the attached photo is just connected to the question *

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?

Which of the following can tax cuts influence? a. aggregate demand and aggregate supply b. aggregate demand but not aggregate supply c. aggregate supply but not aggregate demand d. neither aggregate demand nor aggregate supply

A fiscal stimulus was initiated by President Obama in response to the economic downturn of 2008-2009. At that time, the president's economists estimated the multiplier to be a. 2.4 for government purchases and 1.4 for tax cuts. b. 3.2 for government purchases and 2.0 for tax cuts. c. 1.6 for government purchases and 0.4 for tax cuts. d. 1.6 for government purchases and 1.0 for tax cuts.

Please solve step by step and quick

Need help what formulas are used to answer questions please show step by step Assume the MPC is 0.75 and policy makers have targeted real GDP to decrease by $300 billion. By how much must taxes be increased to achieve this goal? Assume the MPC is 0.70 and the government increases spending on public school programs by $20 billion. What is the value of the initial impact on real GDP? What is the value of the total impact on real GDP?

Use 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?

The graph below depicts an economy where a decline in aggregate demand has caused a recession. Assume the government decides to conduct fiscal policy by increasing government purchases to reduce the burden of this recession. Fiscal Policy Price Level 160 LRAS AS 140 120 100 80 60 40 20 0 AD 1 AD 80 160 240 320 400 480 560 640 720 800 Real GDP (billions of dollars) Instructions: Enter your answers as a whole number. a. How much does aggregate demand need to change to restore the economy to its long-run equilibrium? $ billion b. If the MPC is 0.6, how much does government purchases need to change to shift aggregate demand by the amount you found in part a? EA billion Suppose instead that the MPC is 0.75. c. How much does aggregate demand and government purchases need to change to restore the economy to its long-run equilibrium? Aggregate demand needs to change by $ billion and government purchases need to change by $ billion.

Suppose the government implements contractionary fiscal policy. As a result, the inflation rate will likely _____ and the real growth rate will likely _____ in the short run. Rise or fall?