When government spending increases by $1, planned expenditures increase by $1 O A. times the spending multiplier and the equilibrium level of income will increase by $1. O B. and the equilibrium level of income will increase by $1. O C. and the equilibrium level of income will increase by $1 times the spending multiplier. O D. and the equilibrium level of income will increase by less than $1.
Q: nultiplier the multiplier emains the same. remains the same. lecreases. decreases. ncreases.…
A: A) OPTION C IS CORRECT
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Q: 1. Suppose that the economy can be described by the following equations: C = 400 + (8/9)*DI I= 300…
A: Disclaimer: As per Bartleby's policy, I am providing you with the answers to the first three…
Q: C = 250 + 0.8 Y I = 150 G = 300 TR = 100 NX = 100 t =0.25 i) Find the equilibrium level of income.…
A:
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A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: Given: C = 250 + 0.8 Y I = 150 G = 300 TR = 100 NX = 100 t =0.25 i) Find the equilibrium level of…
A: Hello. Thank you for the question. Since there are multiple subpart question uploaded here, as per…
Q: Suppose initially the marginal propensity to consume in an economy is 0.75 and the tax rate is zero.…
A: Tax multiplier is the ratio of the total change in real GDP caused by a change in taxes.
Q: 2. Given: C = 250 + 0.8 Y I = 150 G = 300 TR = 100 NX = 100 t =0.25 i)Find the equilibrium level of…
A: Hey, Thank you for the question. According to our policy, we can only answer 3 subparts per…
Q: 1. Calculate GDP loss if equilibrium level of GDP is $8,000, unemployment rate 8.8%, and the MPC is…
A: Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…
Q: Question 3 Given the following information: 1= 150, G = 150, T-150 and C = 150 +0.75(Yd) Which of…
A: Here, given information is, Investment (I): 150 Government spending (G): 150 Taxes (T): 150…
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A: Marginal propensity to consume refers to the change in consumption due to change in income. Given,…
Q: 1. Suppose that the economy can be described by the following equations: C = 400 + (8/9)*DI I= 300…
A: Given information C= 400+(8/9)*DI I=300 G=800 T-1/2*Y X-M=0
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A: Hi! thank you for the question but as per the guidelines, we answer only one question at one time.…
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A: reduction in taxes may increases the consumption , and MPC refers the part of income which consumed…
Q: Instructions: In the table, enter your answers as a whole number. Round your answers for the MPC and…
A: a) MPC = ∆C/∆Y From the given table, ∆C = 80 ∆Y = 100 Hence MPC (c) = 80/100 = 0.8
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Q: certain percentage of it. That amount recirculates through the economy and adds additional income,…
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A: Given MPC = 0.65 MPS = 1 – MPC = 0.35 Income = 500 Spending multiplier = 1 / MPS = 2.86
Q: 1. Based on the following information: C = 40 +0.7Yd, T = Tg-R, I = 150, G = 250, Tg = 50, R = 35 a.…
A: Given:- C=40+0.7YdT=Tg-RI=150G=250Tg=50R=35 Dear Student as you have posted multiple sub-parts of a…
Q: 2. The multiplier effect of a change in government purchases Consider a hypothetical closed economy…
A: Given, Household spending= $0.70 of each additional dollar Savings = $0.30 of additional dollar
Q: Suppose the government wishes to eliminate an inflationary gap of $100 billion and the MPC is 0.5.…
A: Answer a) Spending multiplier = 1(1-MPC) =11-0.5=2
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A: Multiplier = Increase in output / Increase in government spending Multiplier= 1 / (1 - Marginal…
Q: 2. Given: C = 250 + 0.8 Y I = 150 G = 300 TR = 100 NX = 100 t =0.25 i) Find the equilibrium level…
A: Hey, Thank you for the question. According to our policy, we can only answer up to 3 subparts per…
Q: YAS 742 + 15P – 28Poil YAD = 478 – 45P+ 18G Suppose initially, the Poil = $93 per barrel and…
A: Answer- "Thank you for submitting the question .But, we are authorized to solve only 3 sub…
Q: a. If full employment in this economy is 130 million, will there be an inflationary expenditure gap…
A: Equilibrium is the point where all actions, powers, influences are equal and balanced.
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A: Hi, Thank you for the question. According to our policy, we can only answer up to 3 sub-parts per…
Q: 14. If the tax multiplier is -6 and taxes are reduced by $100 billion, output: (A) falls by $100…
A: Given:Tax multiplier=-6Change in tax=$100 billion
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A: Macroeconomics is a part of economics that deals with production, decision and allocation concerning…
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Q: 1. Suppose that the economy can be described by the following equations: C = 400 + (8/9)*DI I = 300…
A: C = 400 + (8/9)*DI I = 300 G = 800 T = (1/2)*Y (X – M) = 0
Q: Given C=500 + 0.80Y, I = 100, G=100, and the government decides to finance G by also increasing…
A: C=500 + 0.80Y I=100 G=100 T=100 tY=0.25Y
Q: Given: C = 250 + 0.8 Y I = 150 G = 300 TR = 100 NX = 100 t =0.25 i) Find the equilibrium…
A: 1) Given: C = 250 + 0.8 Y I = 150 G = 300 TR = 100 NX = 100 t =0.25
Q: b. If government spending is increased to G = 80, what hap- pens to equilibrium income? Explain…
A: Answer: the formula for government spending multiplier is given below:…
Q: C = 450 + 0.4Y I = 350 G = 150 X = 70 Z = 35 + 0.1Y T = 0.15Y Yf = 1550 Q.2.1 Calculate the level…
A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and…
Q: Given: C = 250 + 0.8 Y I = 150 G = 300 TR = 100 NX = 100 t =0.25 i) Find the equilibrium level of…
A: Hi, Thank you for the question. According to our policy, we can only answer up to 3 sub-parts per…
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Q: 1. Suppose that the economy can be described by the following equations: C = 400 + (8/9)*DI I= 300…
A: Initially, the economy was described in the following set of equation:…
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A: A multiplier is a term used in economics to describe an economic element that, when raised or…
Q: 4. The multiplier effect of a change in government purchases Consider a hypothetical closed economy…
A: The multiplier effect is the theory that government spending to stimulate the economy causes an…
Q: 1. The multiplier effect of a change in government purchases Consider a hypothetical closed economy…
A: The multiplier effect asserts that as government expenditure increases to stimulate the economy,…
Q: YAS = 742 + 15P – 28Poil YAD - 478 – 45P + 18G Suppose initially, the Poil = $93 per barrel and…
A: Given: YAS=742+15P-28POilYAD=478-45P+18G Poil=$93 per barrel Government spending=$630 Note: Due to…
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- Figure 8-23. The figure represents the relationship between the size of a tax and the tax revenue raised by that tax. 6 on4m21 3 Tax Revenue B Tax Size Refer to Figure 8-23. If the economy is at point A on the curve, then a small increase in the tax rate will O increase the deadweight loss of the tax and increase tax revenue. O increase the deadweight loss of the tax and decrease tax revenue. decrease the deadweight loss of the tax and increase tax revenue. O decrease the deadweight loss of the tax and decrease tax revenue.QUESTION 8 Which of these is positively related to the size of the multiplier? O a. The marginal propensity to consume O b. The marginal utility of money OC. The marginal tax propensity Od. The marginal propensity to saveWhy does a $1 increase in government purchases lead to more than a $1 increase in income and spending? OA. Through the government purchases multiplier, the $1 increase in government spending will lead to a decrease in aggregate demand and national income, which will lead to a decrease in induced spending OB. Through the government purchases multiplier, the $1 increase in government spending will lead to an increase in aggregate demand and national income, which will lead to a decrease in induced spending OC. Through the government purchases multiplier, the $1 increase in government spending will lead to an increase in aggregate demand and national income, which will lead to an increase in induced spending OD. Through the government purchases multiplier, the $1 increase in government spending will lead to a decrease in aggregate demand and national income, which will lead to an increase in induced spending
- QUESTION 6 In the diagram below, what would happen if the government were to increase spending on goods and services? CWJ W O a. The line marked W would shift downwards and national income would move towards its equilibrium level O b. The line marked J would shift upwards and national income would move towards its equilibrium level O c. The line marked W would shift upwards and national income would move towards its equilibrium level O d. The line marked J would shift downwards and national income would move towards its equilibrium level4. Why does a reduction in taxes have a smaller multiplier effect than an increase in government spending of an equal amount?8. Given each of the following values for both the spending multiplier and the tax multiplier, calculate both the MPC and the MPS. a. 20 b. 10 c. 8 d. 5
- What are the three injection into the income-expenditure flow? O Government Spending, Consumer Spending. Exports O Goverment Spending. Investment, Exports : O Government Spending, Investment, ImportsWhat is the formula for the marginal propensity to expend? A aggregate expenditures/A national income O b. A autonomous expenditures/A national income O a. O c. A consumption/A national income O d. A national income/A induced expendituresThe formula for the government spending multiplier is A) 1/(1+ MPC). B) 1/MPS. O C) 1/MPC. O
- The marginal propensity to consume (MPC) for this econamy is . and the spending multiplier for this economy is Suppose the govemment in this economy decides to decrease govemment purchases by $250 bilion. The decrease in government purchases will lead to a decrease in income, generating an initial change in consumption equal to second change in consumption equal to This decreases income yet again, causing a The total change in demand resulting from the initial change in government spending is The following graph shows the aggregate demand curve (AD ) for this economy before the change in govemment spending. Use the green line (trangie symbol) to plot the new aggregate demand curve (AD:) after the multiplier effect takes place. For simplioity, assume that there is no "crowding out." Hint: Be sure that the new aggregate demand curve (AD) is paralel to the initial aggregate demand curve (AD). You can see the slope of AD by selecting t on the graph. 540 AD. AD, 130 100 OUTPUT (Tions of…7 Derive multiplier for a change in the government purchase and the taxes. Why is the tax multiplier smaller than the government purchase multiplier?TRUE - OR - FALSE Government purchases and income taxes will have the same effect on the multiplier. O True O False