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Due to the pandemic, govs have gone into more debt to support increased spending. Which of the following statements is true? (there can be more than 1)
- In the long-run, if interest rates rise, there will be a reduction in investments made by the private sector
- in the short run, the economy will stabilize as prices are stickier
- In the long run investments by the private sector will increase when the marginal propensity to consume is greater than 1
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- Suppose the following list of events describes all of the economic activity resulting from an increase in government spending. Suppose that at each step after the initial one, the marginal propensity to consume is 0.67 and the tax rate is 16%. Step 0. The government spends $8500 on meat to host a very large dinner for foreign diplomats. Step A. The butcher takes the income earned by selling the meat, saves some, and spends the rest on a wedding cake for his daughter. Step B. The baker who produced the wedding cake saves some of her earnings and uses the rest to purchase beautiful candlesticks as gifts for all of her friends. Step C. The local candlestick maker saves some of his revenue for retirement and spends the rest on building materials to improve his house. Instructions: Modify the settings in the interactive tool to represent this event. Then click "Spending Rounds" and use the table to answer the following questions. Round answers to the nearest cent, if necessary. How much…Suppose the following list of events describes all of the economic activity resulting from an increase in government spending. Suppose that at each step after the initial one, the marginal propensity to consume is 0.62 and the tax rate is 8%. Step 0. The government spends $8500 on meat to host a very large dinner for foreign diplomats. Step A. The butcher takes the income earned by selling the meat, saves some, and spends the rest on a wedding cake for his daughter. Step B. The baker who produced the wedding cake saves some of her earnings and uses the rest to purchase beautiful candlesticks as gifts for all of her friends. Step C. The local candlestick maker saves some of his revenue for retirement and spends the rest on building materials to improve his house. Instructions: Modify the settings in the interactive tool to represent this event. Then click "Spending Rounds" and use the table to answer the following questions. Round answers to the nearest cent, if necessary. How much does…What is the eventual effect on real GDP if the government increases its purchases of goods and services by $75,000? Assume the marginal propensity to consume (MPC) is 0.75. $ What is the eventual effect on real GDP if the government, instead of changing its spending, increases transfers by $75,000? Assume the MPC has not changed. $ An increase in government transfers or taxes, as opposed to an increase in government purchases of goods and services, will result in an identical eventual effect on real GDP. no change to real GDP. a larger eventual effect on real GDP. a smaller eventual effect on real GDP.
- The table contains information about the nation of Syldavia. There are no income taxes or imports in this nation. Real GDP, Y (billions of 2012 dollars) Consumption expenditure, C (billions of 2012 dollars) Investment, I (billions of 2012 dollars) Government expenditure, G (billions of 2012 dollars) 15 6 5 5 20 10 5 5 25 14 5 5 30 18 5 5 35 22 5 5 The marginal propensity to consume in Syldavia is equal to A. 0.40. B. 5.00. C. 0.80. D. 0.75. E. 0.20.Suppose the government raised taxes by $100,000 and simultaneously raised spending by $100,000. If the marginal propensity to consume is 0.65, what is the net effect on Gross Domestic Product? (use a negative number if GDP would go down, and a positive number if GDP would go up) 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.Macmillan Learning What is the eventual effect on real GDP if the government increases its purchases of goods and services by $60,000? Assume the marginal propensity to consume (MPC) is 0.75. What is the eventual effect on real GDP if the government, instead of changing its spending, increases transfers by $60,000? Assume the MPC has not changed. An increase in government transfers or taxes, as opposed to an increase in government purchases of goods and services, will result in O no change to real GDP. O a smaller eventual effect on real GDP. a larger eventual effect on real GDP. O an identical eventual effect on real GDP.
- You Suppose the government increases education spending by $20 billion. If the marginal propensity to consume is 0.75, how much will total spending increase? Instructions: Round your response to one decimal place. $ billionFill in the missing blanks in the following table. Assume for simplicity that taxes are zero. Also assume that the values represent billions of dollars. National Income and Real GDP (Y) $12,000 $13,000 $14,000 $15,000 $16,000 In the above example, the marginal propensity to consume is In the above example, the marginal propensity to save is Consumption (C) $9,600 $10,400 $11,200 $12,000 $12,800 Saving (S) $ $ (Enter your response rounded to two decimal places.) (Enter your response rounded to two decimal places.) GA $ $ $Alien Advisor Our economists have redone their calculations. They now estimate that citizens in our country have an MPC of 0.80. We can fix the problem by decreasing GDP by 850. How much should we increase taxes?
- For questions #9, 10, 11, and 12 use the following equation. C = 20 + 0.2(Y – T) 9) What is the marginal propensity to save for this economy? a) 2% b) 20% c) 60% d) 80% ( plz show the equation and how you use the numbers from the equation to solve it)10) What is the tax multiplier for this economy? a) -0.25 b) 0.25 c) -1.25 d) 1.25 11) If the government increases taxes by 20, then how much will consumption change by? a) -5 b) 5 c) -25 d) 25 12) To increase real GDP by 40 the government needs to change government spending by a) 48 b) 40 c) 32 d) 20Question 34 If your marginal propensity to consume is 0.6 and you get an additional $600 in income, you would spend ______ on consumption. $200 $240 $360 $1,000 $1,500Logically discuss the impact of the increase in governmenttaxes on consumption in the long run.
