The diagram below shows two budget deficit functions for a hypothetical economy. Budget Deficit (millions of dollars) 14 7.5 4 Budget Surplus (millions of dollars) FIGURE 31-2 B 100 200 300 400 500 $4 million. $6.5 million. $7.5 million. $14 million. Insufficient information to know. B₁ 600 700 Во Real GDP (millions of dollars) Refer to Figure 31-2. Initially, suppose the economy is at point A on budget deficit function Bo. Real GDP (Y) is $100 million. If the level of potential output (Y*) were $300 million, the structural budget deficit would be

The diagram below shows two budget deficit functions for a hypothetical economy. Budget Deficit (millions of dollars) 14 7.5 4 Budget Surplus (millions of dollars) FIGURE 31-2 B 100 200 300 400 500 $4 million. $6.5 million. $7.5 million. $14 million. Insufficient information to know. B₁ 600 700 Во Real GDP (millions of dollars) Refer to Figure 31-2. Initially, suppose the economy is at point A on budget deficit function Bo. Real GDP (Y) is $100 million. If the level of potential output (Y*) were $300 million, the structural budget deficit would be

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter11: Managing Aggregate Demand: Fiscal Policy

Section11.B: Algebraic Treatment Of Taxes And Fiscal Policy

Problem 3TY

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The Canadian federal budget moved from a surplus of 9.6billioninthe2007-2008 fiscalyeartoade ficitof5.8 billion the next year, and a large deficit of S55.6 billion in 2009-2010. a. Suppose real GDP was at potential in each of the first two years. What can you conclude about the cause of the change in the budget deficit? Show this change in a diagram of the budget deficit function. b. Suppose from 2008-2009 to 2009-2010, two things happened: real GDP fell and the government implemented an expansionary fiscal policy (both of which were true). Show these two separate events in a diagram of the budget deficit function.
Question 15/28 IV A BOOKMARK 15 MULTIPLE SELECT: If the government decides to utilize a contractionary fiscal policy, which of the following actions can it take? Pick all that apply. A Tax cuts B Tax increases C Spending cuts D Spending increases DELL esc Ce @ # $ % & 1 2 3 4 7 e r y k S f g. C V b m 个 N
G Spending and NTR Budget Deficit Budget Surplus Y1 V1 . I I Y2 V2 je I I Y3 I V3 G NTR Real GDP BL Real GDP In the following graph, NTR is net tax revenue, G is government spending on goods and services, BL is budget line. Which of the following is true? A balanced budget would occur at income level Y1 A balanced budget would occur at income level Y2 A balanced budget could occur at income levels Y1, Y2 or Y3 The existence of a balanced budget cannot be determined because no inflation on tex revenues is given
The following table shows government spending and tax revenue for a hypothetical economy over a five-year period. All figures are in billions. Year Government Spending Tax Revenues 1 $ 800 $825 2 850 850 3 900 875 4 950 900 5 1000 925 i) In what years were there budget deficits and what were the amounts? ii) In what years were there budget surpluses and what were the amounts?
The table below shows hypothectical figures of revenue and spending for the Canadian government. For simplicity, assume that all of the spending grants to other levels of government were spent in Canada on goods and services. REVENUES Personal income taxes Corporate income taxes $120 28 2 48 18 Other revenues 21 Total Revenues 237 a. The projected NTR in this budget plan is $ b. The value of NTR less government spending on goods and services (G) is $ Round your answers to 1 decimal place. c. The percentage of total revenue made up by personal income taxes is d. The percentage of total revenue made up by corporate income taxes is e. The percentage of total outlays made up by transfer payments to persons is f. The percentage of total outlays made up by public debt charges is Federal Government's Budget Plan for Fiscal Year ($billion) OUTLAYS Other income taxes GST and excise taxes EI premiums Transfers to persons Spending grants to other levels of government Public debt charges Direct…