a real GrOSS Dom stic OT Ș18.4 billloh. The debt service payments are $35 million with a 4% interest rate and the primary budget deficit for the upcoming year is expected to be $185 million and the economy is expected to grow by 2.5%. What is the current debt-to-GDP ratio and how much will that change given the new budget forecast? (show your work and the new debt-to-GDP ratio)
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- 4 Suppose that Alberta imposes a sales tax of 10 percent on all goods and services. An Albertan named Ralph then goes into a home improvement store in the provincial capital of Edmonton and buys a leaf blower that is priced at $200. With the 10 percent sales tax, his total comes to $220. How much of the $220 paid by Ralph will be counted in the national income and product accounts as private income (employee compensation, rents, interest, proprietors' income, and corporate profits) v (Click to select) $220 $200 $180 None of the above7. The following is information from the national income accounts for Ensperanza Island, a country on the Zambezi Ocean. Figure 1.1 Ensperanza Island GDP К 6000 Gross Investment K800 Net Investment К200 Consumption К4000 Government Purchases of goods and services K1100 Government Budget surplus K30 Use the information in figure 1.1 to answer the following question. Calculate: (i) NDP (ii) Net Exports (ii) Government taxes minus transfers? (iv) Disposable personal income?'The U.S., world's largest economy, went into recession in February of 2020. It has taken a broad range of steps to combat the economic disruption caused by COVID-19. In response to this crisis, governments have enacted sweeping and sizable fiscal stimulus of trillions of dollars.' Is it an appropriate policy response if the primary responsibility of the government is to maintain economic growth? Explain the significance of Fiscal policy for an economy? Is there any difference in the two approaches of fiscal expansion through - direct transfer benefit and government spending directly on purchase of goods and services that may influence real GDP? What role does multiplier play? Explicate. Support your answer with the suitable diagram/s.
- Suppose that the investment demand curve in a certain economy is such that investment declines by $110 billion for every 1 percentage point increase in the real interest rate. Also, suppose that the investment demand curve shifts rightward by $170 billion at each real interest rate for every 1 percentage point increase in the expected rate of return from investment. If stimulus spending (an expansionary fiscal policy) by government increases the real interest rate by 2 percentage points, but also raises the expected rate of return on investment by 1 percentage point, how much investment, if any, will be crowded out? Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.Suppose that the investment demand curve in a certain economy is such that investment declines by $110 billion for every 1 percentage point increase in the real interest rate. Also, suppose that the investment demand curve shifts rightward by $190 billion at each real interest rate for every 1 percentage point increase in the expected rate of return from investment. If stimulus spending (an expansionary fiscal policy) by government increases the real interest rate by 2 percentage points, but also raises the expected rate of return on investment by 1 percentage point, how much investment, if any, will be crowded out? Instructions: Enter your answer as a whole number. billion %242. In 2020, the Australian government as a part of its Covid-related fiscal package made payments to low- income Australians. If you were an economic advisor to the government when that decision was made, would you have supported it? Explain.:
- explanation. Be sure to exp Assume the United States has been in another recession for the past 10 months. Unemployment is 10% and GDP has dropped $1.9 trillion from its previous peak of $ 20.8 trillion. The housing and heavy equipment industries have been hit the hardest. Inflation has been near the 2% target but has started to dip below. Also, the countries average MPC is 60. Determine the best fiscal policy/strategy to help the economy recover and explain why it is the best choice. Be sure to reference Aggregate Demand and Aggregate Supply and explain your specific tools in your answers. Calculations Explanation Graph (More space for the explanation on the back)Assume the government makes no fiscal policy changes when the economy experiences a downturn. Which outcome would be expected? O Government expenditure to be higher and tax revenues to be lower, probably leading to a budget deficit. Government expenditure to be lower and tax revenues to be lower, probably leading to a budget surplus. O Government expenditure to be higher and tax revenues to remain the same, probably leading to a budget deficit. Government expenditure to be higher and tax revenues to be lower, probably leading to a budget surplus. O Government expenditure to remain the same and tax revenues to be lower, probably leading to a budget deficit.Discuss the important features of the public budget and the relationshipbetween revenues and expenditures.
- 5. Expenditure Gaps The following graph shows the planned expenditure line (AE) for an economy where current equilibrium income is $350 billion and full-employment income is $100 billion. REAL EXPENDITURE (Billions of dollars) 700 600 500 400 300 200 100 Full-Employment Income 0 0 100 200 400 500 INCOME (Billions of dollars) 300 The economy is experiencing would require a $ 45-degree line billion 600 PE 700 PE ? with the absolute value of the gap equal to $ in government spending. Thus the value of the multiplier for this economy is billion. Closing the income gap On the graph, shift the PE line to show the change in the planned expenditure line necessary to close the income gap.1. A college wants to produce an effigy for the student carnival. Preliminary studiesmade it possible to establish that the production of these effigies requires fixed costs of $2,008and variable costs (materials, labor, energy) of $0.90 per effigy. One of therequirements of the college being not to make a deficit, he had a market study carried out.It appears from this study that by selling these effigies for $3.75 we can hope to sell them1,000, whereas by setting the price at $2.50, the potential sales are 3,000.a) Express the demand in terms of the selling price and representgraphically this function.b) Express the cost of production as a function of the selling price.c) Express the income in terms of the selling price and determine the price that thecollege should fix to maximize the income from this sale of effigies.d) Represent the income function and the cost function on the same system of axesand determine the prices corresponding to the break-even thresholds and numbereffigies…Suppose a small egg to income tax rates 20% for all income up to $50,000 and 30% for any income earned above $50,000 suppose that the economy has a government budget for this year. You’re one of $70,900 and a total of five individuals earning the following income Carla 28,000 been 49,000 Jennifer $50,000 Donnie $75,000 Maria $110,000. In year one does the economy have a balance, budget, budget surplus or a budget deficit accompany a response with corresponding dollar amount