MACROECONOMICS FOR TODAY
10th Edition
ISBN: 9781337613057
Author: Tucker
Publisher: CENGAGE L
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Question
Chapter 8, Problem 14SQ
To determine
The area of dis-savings in the economy.
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Students have asked these similar questions
Disposable income ________ when ________.
a.decreases; taxes increase
b.decreases; transfer payments increase
c.increases; government expenditures decrease
d.decreases; aggregate income increases
Consider a tax cut which affects not only consumer disposable income, but also after-tax earnings from labor supplied to labor markets and from financial assets acquired through saving. In the long run we would expect this tax cut to
A decrease the level of real GDP.
B decrease the price level.
C increase both the price level and the level of real GDP.
D decrease the price level and increase the level of real GDP.
Refer to Table 24.6. The value of the government spending multiplier
A. is 10.
B. is 5.
C. is 0.9.
D. cannot be determined from the available information.
Chapter 8 Solutions
MACROECONOMICS FOR TODAY
Ch. 8.4 - Prob. 1YTECh. 8 - Prob. 1SQPCh. 8 - Prob. 2SQPCh. 8 - Prob. 3SQPCh. 8 - Prob. 4SQPCh. 8 - Prob. 5SQPCh. 8 - Prob. 6SQPCh. 8 - Prob. 7SQPCh. 8 - Prob. 8SQPCh. 8 - Prob. 9SQP
Ch. 8 - Prob. 1SQCh. 8 - Prob. 2SQCh. 8 - Prob. 3SQCh. 8 - Prob. 4SQCh. 8 - Prob. 5SQCh. 8 - Prob. 6SQCh. 8 - Prob. 7SQCh. 8 - Prob. 8SQCh. 8 - Prob. 9SQCh. 8 - Prob. 10SQCh. 8 - Prob. 11SQCh. 8 - Prob. 12SQCh. 8 - Prob. 13SQCh. 8 - Prob. 14SQCh. 8 - Prob. 15SQCh. 8 - Prob. 16SQCh. 8 - Prob. 17SQCh. 8 - Prob. 18SQCh. 8 - Prob. 19SQCh. 8 - Prob. 20SQ
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- Which of the following statements are correct? Select one: а. Households smooth their consumption to match their volatile income. b. Borrowing allows all households to raise their consumer spending given an anticipated rise in income. С. Weak-willed households save in the face of an anticipated temporary fall income. d. Households smooth their income to match their volatile consumption.arrow_forwardWhich of the following statements are correct? Select one or more: a. Households smooth their income to match their volatile consumption. b. Borrowing allows all households to raise their consumer spending given an anticipated rise in income. c. Weak-willed households save in the face of an anticipated temporary fall income. d. Households smooth their consumption to match their volatile income.arrow_forwardThe multiplier is ? a. the ratio of government debt to income b. the ratio of an increase in consumer spending to an increase in GDP c. the ratio of the total increase in GDP to an initial increase in exogenous spending (e.g. investment or government spending, if these are assumed not to depend on GDP) d. the ratio of the money supply to nominal expenditurearrow_forward
- Select one: a. Borrowing allows all households to raise their consumer spending given an anticipated rise in income. b. Households smooth their consumption to match their volatile income. c. Weak-willed households save in the face of an anticipated temporary fall income. d. Households smooth their income to match their volatile consumption.arrow_forwardThe classification of government spending as an investment or having an investment-effect depends on: a. How the spending affects current consumption. b. How the spending affects future productivity. c. How the spending affects current stock prices. d. How the spending affects future stock prices.arrow_forwarda. What is the equilibrium rate of real GDP? $ __ billion b. If full-employment real GDP is $800 billion, what problem does this economy have? multiple choice This economy has a recessionary gap. This economy has an inflationary gap. This economy does not have a problem. c. How large is the real GDP gap? $ __ billionarrow_forward
- The relationship between changes in spending and Real GDP without price increase is: a. Economic Growth b. Demand Pull c. Multiplier Effect d. Fiscal Changearrow_forwardKeynesian economists assert that a GDP gap = $6 trillion needs an increase in government spending of ... Group of answer choices 1. More than $6 trillion 2. Less than $6 trillion 3. $6 trillionarrow_forward1. If equilibrium national income is higher than the potential income at full- employment, there will be in the economy a.deflationary gap b.recessionary gap c.inflationary gap d. inequality gaparrow_forward
- The partial data in the table below are for the economy of Arinaka. Planned investment, government spending, and all taxes are autonomous. You may assume that the MPC, MPS, and MPM are constant. a. Fill in the blanks in table below, YD AE Unplanned I Y. $300 C $200 $60 $50 60 $60 $20 -10 $50 350 400 450 b. The value of equilibrium income is $ c. If planned investment decreases by $20, the new value of equilibrium income is $arrow_forwardIf the government decreases taxes, disposable income does not change. falls. increases. This causes total consumer spending to not change. increase. decrease.arrow_forwardIf the economy is in a recessionary period how, specifically, might the government use their three tools? three tools change the tax rate change the level of govertment spending change transfer paymentsarrow_forward
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