The federal government decides to stimulate the economy and increases government expenditure on new infrastructure projects by $100 billion. The marginal propensity to consume is MPC = 0.3 and the marginal propensity to import is MPI = 0.08. Assuming no crowding out effect, what is the increase in output caused by the stimulus package of$100 billion in a closed economy?
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The federal government decides to stimulate the economy and increases government expenditure on new infrastructure projects by $100 billion. The marginal propensity to consume is MPC = 0.3 and the marginal propensity to import is MPI = 0.08. Assuming no crowding out effect, what is the increase in output caused by the stimulus package of$100 billion in a closed economy?
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- Suppose a closed economy with no government spending which in equilibrium is producing an output and income of 2500. Suppose also that the marginal propensity to consume is 0.80, and that, if at full employment, the economy would produce an output and income of 3900 By how much would the government need to cut taxes (T) to bring the economy to full employment?10 If Ricardian equivalence holds, and the marginal propensity to consume (MPC) is 0.75, What is the effect of a $100 reduction in taxes on aggregate demand (AD) ?1.Gomad is a small economy operating with output that is $40 million below its natural level. Assume there is no crowding-out effect and the price level is completely fixed in the short run, how much government spending does the fiscal policymakers need to change to close this recessionary gap if MPC is 0.8?
- -SRAS PL, PL AD2 AD Y,Y2 REAL GDP The Aggregate Demand Model shows an increase in Aggregate Demand or GDP, Which type of Fiscal Policy was used to cause this change and why? Expansionary Policy to raise GDP and lower the unemployment rate Expansionary Policy to raise GDP and lower Inflation Contractionary Policy to decrease GDP and lower the unemployment rate Contractionary Policy to increase GDP and Increase Inflation PRICE LEVELIs is possible for federal investment to have a negative rate of return? Yes, if the spending results in a strong crowding-out effect or if state and local governments substitute towards federal investment by reducing stateand local investment. Either would potentially reduce future productivity and output (GDP), resulting in a negative return. Yes, if the spending results in a weak crowding-out effect or if state and local investments complement the increase in federal investment by. Either would potentially reduce future productivity and output (GDP) and hence result in a negative return. No. At worst, federal investment can have no future return as the expenditure offered some form of service (ex. jobs training) or useful infrastructure (ex. highways). No. If in the future there were a negative return, the federal government would increase expenditures again to offset it.The cost of rebuilding the Philippines after typhoon Haiyan could reach USD 5.8bn”, a senior official has said. Assume the government of Australia Department of Foreign Affairs and Trade provided a grant of USD 5.8 billion. Also assume that despite the hardships the Philippine families experienced, 15% was the beneficiary savings from the Australian grant. Further, assume all other factors remain constant.a. Calculate the total effect of the spending multiplier of the Australian government grant on the Philippine economy GDP growth. b. Examine the overall multiplier effect of the USD5.8 billion grant on the Philippine economy. Answer asap n correctly with proper typed explanation
- posting this again, can you tell me which questions i've gotten wrong? i dont need any explanations for the ones i've gotten right. i just dont know which ones i've missed- if you could explain those that'd be fantastic. thanks 4- Tax cuts in the classical range of the AS will stimulate output and unemployment -false 5- Increasing welfare payments by borrowing money to do so will increase AD- true 6- if the mpc increases, the multiplier decreases- false 7- if the mps increases the multiplier decreases -true 8- part of the cost of growing government budget deficits is and “opportunity cost” of what else could have been done with the money, particularly if the borrowing is used to increase consumption spending. -true 9- tax cuts in the classical range of the AS curve will stimulate output and employment. -true 10- if the AS curve were flat/horizontal an increase in AD would not be inflationary- true 11- an increase in AD might be cause by improving technology in manufacturing processes.…34.With the additional leakages of imports and taxes in additional to savings in a public, open economy, how is the economy still able to reach equilibrium? 35.Compare and contrast the recessionary expenditure gap and the inflationary expenditure gap. 36.If there is a recessionary expenditure gap of $100 billion and the MPC is 0.80, by how much must taxes be reduced to eliminate the recessionary expenditure gap?Question 7. Suppose a closed economy with no government spending which in equilibrium is producing an output and income of 2300. Suppose also that the marginal propensity to consume is 0.80, and that, if at full employment, the economy would produce an output and income of 3750 By how much would the government need to cut taxes (T) to bring the economy to full employment? (round your answer to the nearest whole value) Your Answer: Answer View hint fr
- An open economy with a government sector is in equilibrium. Assume the following: Marginal propensity to save = 0.4 Marginal propensity to tax = 0.2 Marginal propensity to import = 0.2Showing your method of working, calculate by how much the equilibrium level of national income would fall, if injections in the economy are reduced by $60m.Suppose a closed economy with no government spending which in equilibrium is producing an output and income of 2250. Suppose also that the marginal propensity to consume is 0.80, and that, if at full employment, the economy would produce an output and income of 3850 By how much would the government need to cut taxes (T) to bring the economy to full employment? (round your answer to the nearest whole value)1. Assume an economy where spending for each sector is: Household: C = 800 + 0.95Qd Business: I = 3000 Public: G = 4000, Tr = 7000, Tx = 1000 + 0.3Q Foreign: X = 1700, Im = 200 + 0.165Q Solve for Autonomous Spending, Spending Multiplier, Disposable Income, Consumption Expenditure, Household Savings, Imports, Net Exports, Government Expenditure, Budget Deficit Q= AS x SM Tx = Txo +tQ (Tax Equation) Tr = Tro (Transfer Payments) Qd = Q - Tx + Tr (Disposable Income) C = a + bQd (Consumption Equation) I = Io (Investment Expenditure) G = Go (Government Purchases) X = Xo (Exports) Im = Imo + mQ (Import Equation) NX = X - Im (Net Exports) GE = G + Tr (Government Expenditure) BD = GE -Tx (Budget Deficit) S = Qd -C (Savings) AS = (a + Io + Go + Xo - Imo + b(Tro - Txo) ) SM = 1/(1-((1-t)b - m))