You know that disposable income is $18 trillion in 2020. Consumption is $13.5 trillion,investment is $4 trillion, and the government budget deficit (G-T) is $2 trillion. Calculate thesize of the trade balance (in $ trillion).Note: A surplus is a positive number, a deficit is a negative number. Start with the nationalincome identity and add taxes such that you have expressions for disposable income (Y-T) andthe government budget deficit.

Government budget deficit occurs when the government expenditure exceed the government revenue.…

Answered: You know that disposable income is $18…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Consider an open economy with a current population of 0.55 million people, and where the potential GDP is $3.24 billion. Consumer expenditure is represented by the following equation: C = 60+ 0.75DI. Exports are constant at $500 million, and investors want to spend $400 million at every level of income. The government purchases are $300 million, imports are constant at $450 million, and taxes are $200 million. (Question 3 of 12) Is there any gap at the current level of GDP? (complete the following sentence) Currently, there is ✓ gap.
What will be the revenue deficit if the revenue expenditure are $91 And the revenue receipts are $80?
# 18 The federal government decides to stimulate the economy and increases government expenditure on new infrastructure projects by $110 billion. The marginal propensity to consume is MPC = 0.4 and the marginal propensity to import is MPI = 0.01. Assuming no crowding out effect, what is the increase in output caused by the stimulus package of $110 billion in an open economy?
If net taxes fall by $80 billion, we would expect the government deficit to fall by $80 billion. household savings to rise by $80 billion. household savings to rise by less than $80 billion. household savings to fall by more than $80 billion.
Assume that the government is implementing an expansionary fiscal policy and as a result has increased borrowing. At the same time, the central bank is carrying out a contractionary monetary policy. As a result, we can expect: Interest rates would rise substantially and private investments would be significantly reduced. Interest rates would not change substantially as the 2 policies counterbalance each other, and private investments would not be significantly reduced. Interest rates and private investments would rise. Interest rates and private investments would fall.
Of the four choices below, which causes a shift in the Supply of dollars to the right? A. An expansionary fiscal policy that raised U.S. income and increased U.S. imports.B. An expansionary fiscal policy that raised U.S. income and reduced U.S. imports.C. A contractionary fiscal policy that reduced U.S. income and lowered U.S. imports.D. A contractionary fiscal policy that reduced U.S. income and increased U.S. imports.
Consider the following hypothetical data for the U.S. economy in 2020 (in trillions of dollars), and assume that there are no statistical discrepancies, zero net incomes earned abroad, and zero taxes on production and imports of net subsidies. Category Category Value $2.6 Exports 0.8 Net transfers and interest earnings 0.8 Nonincome expense items 0.8 Imports 8.1 Corporate taxes 1.2 Social security contributions 11.7 Government spending Value $1.3 Corporate profits before taxes deducted Proprietorial income 1.9 Rent 1.6 Interest 1.7 Wages Depreciation Consumption 0.6 2.2 1.7 a. Calculate the gross domestic income. S trillion. (Enter your response rounded to one decimal place.) Calculate GDP. S trillion. (Enter your response rounded to one decimal place.)
The two ways in which deficit spending can impose a burden on future generations are: a)by requiring future generations to face lower government spending and to utilize a smaller stock of human capital. b)by substituting private goods for public goods and thereby benefiting only large businesses. c)by substituting private goods for public goods and thereby shifting resources to foreign residents. d)by requiring future generations to face higher taxes and to work with a lower accumulated stock of capital goods.
The structure of an economy is completely described by the following equations: (1) C = 20 + 0.7(Y-T)(2) T = 0.3YC is consumption, Y is GDP (Income) and T is tax revenue. In 2007 government expenditure (G) was 660 € and autonomous investment (I) was 340 €. In 2008 government expenditures are to be cut to 558 €. Calculate equilibrium income (Y0) and the government budget deficit for 2007 and 2008, respectively. Are the government budgets for both years in line with the Maastricht criteria?
Use the table to answer the following questions: Public Debt over Time United States France Italy Belgium Australia France Belgium Australia the United States 2001 Debt $3.3 trillion $0.9 trillion $1.5 trillion $0.3 trillion $0.2 trillion According to the table, which country appeared to be in the worst fiscal shape in 2012? Italy GDP $10.2 trillion $1.5 trillion $1.2 trillion $0.3 trillion $0.7 trillion 2011 Debt $12.2 trillion $1.8 trillion $1.7 trillion $0.3 trillion $0.4 trillion GDP $15.0 trillion $2.0 trillion $1.6 trillion $0.4 trillion $1.4 trillion
Use some of the information below to determine which statement is TRUE. Corporate profits: 45 Depreciation: 28 Exports: 100 Government Purchases of Goods and Services: 320 Government Transfer Payments: 255 Gross Private Domestic Investment: 160 Imports: 119 (Net) Indirect Business Taxes: 7 Net Factor Payments to Rest of World: 25 Personal Consumption Expenditures: 626 Total government tax and fee revenue: 368 Wages and Salaries: 829 The trade deficit is 19 The trade deficit is 12 The trade deficit is 20 The trade surplus is 58 The trade surplus is 24
No. 6 Consider the following equations for this particular economy. C = 100+ 0.75Yd I = 150 G = 250 T = 200 X = 100 Q = 0.25Yd a. What is the equilibrium level of income of this economy? Is the trade balance in deficit or surplus? By how much? b. Suppose there is an increase in government expenditures by 50. What is the effect on the equilibrium level of income? What is the effect on the trade balance? Explain your answers. C. This question is independent of Question (b). Suppose exports increase by 50. Compared to you answer in (a), what is the effect on the equilibrium level of income and on the trade balance? Explain your answers.

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