MACROECONOMICS >CUSTOM<
20th Edition
ISBN: 9781259877254
Author: McConnell
Publisher: MCG CUSTOM
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Question
Chapter 16.6, Problem 3QQ
To determine
Impact of tax cut.
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For an economy, the following information is given to you.
C= 0.7(1 -t)Y
I 300-0.02r
M"/P= 2+0.2Y – 0,3r
where C is consumption t is proportion income tax rate, I is investment, M" is money demand, P is price, Y is
income (output) and r is real interest rate. If Government expenditure (G) is 479 , tax rate (t) is 14%, price level (
P) is 17, and nominal money supply is 980, the IS-LM equilibrium output is
(two decimal
points).
Question 21
An increase in real per capita GDP in an economy would __________ the average standard of living and would _________ life expectancy.
raise; have little effect on
raise; shorten
raise; increase
have no effect on; increase
lower; shorten
Question 22
An increase in _________ would lead to an increase in long-run economic growth.
consumer spending and borrowing
government taxes and fees
resources and technology
imports and exports
prices and interest rates
Question 23
Which of the following are the three major categories of resources?
physical capital, technology, institutions
land, labor, technology
institutions, human capital, land
natural resources, physical capital, human capital
labor, physical capital, technology
If Investment = f(r*)
a. Explain with pictures how it affects the balance of Supply/Saving and Investment Demand in the event of Fiscal policy, namely by decreasing state spending and increasing taxes.
b. Explain with pictures how it affects the balance of Supply/Saving and Investment Demand in the event of Fiscal policy, namely by decreasing state spending and increasing taxes if it happens overseas
Chapter 16 Solutions
MACROECONOMICS >CUSTOM<
Ch. 16.1 - Prob. 1QQCh. 16.1 - Prob. 2QQCh. 16.1 - Prob. 3QQCh. 16.1 - Prob. 4QQCh. 16.5 - Prob. 1QQCh. 16.5 - Prob. 2QQCh. 16.5 - Prob. 3QQCh. 16.5 - Prob. 4QQCh. 16.5 - Prob. 1QQCh. 16.5 - Prob. 2QQ
Ch. 16.5 - Prob. 3QQCh. 16.5 - Prob. 4QQCh. 16.6 - Prob. 1QQCh. 16.6 - Prob. 2QQCh. 16.6 - Prob. 3QQCh. 16.6 - Prob. 4QQCh. 16 - Prob. 1DQCh. 16 - Prob. 2DQCh. 16 - Prob. 3DQCh. 16 - Prob. 4DQCh. 16 - Prob. 5DQCh. 16 - Prob. 6DQCh. 16 - Prob. 7DQCh. 16 - Prob. 8DQCh. 16 - Prob. 1RQCh. 16 - Prob. 2RQCh. 16 - Prob. 3RQCh. 16 - Prob. 4RQCh. 16 - Prob. 5RQCh. 16 - Prob. 6RQCh. 16 - Prob. 7RQCh. 16 - Prob. 8RQCh. 16 - Prob. 9RQCh. 16 - Prob. 1PCh. 16 - Prob. 2PCh. 16 - Prob. 3PCh. 16 - Prob. 4PCh. 16 - Prob. 5PCh. 16 - Prob. 6PCh. 16 - Prob. 7P
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