Question 1. Use the Keynesian cross to predict the impact on equilibrium GDP of a. An increase in government spending b. An increase in taxes c. An equal increase in both government spending and taxes
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- Use the Keynesian cross to predict the impacton equilibrium GDP of the following. In eachcase, state the direction of the change and give aformula for the size of the impact.a. An increase in government purchasesb. An increase in taxesc. Equal-sized increases in both governmentpurchases and taxes12. Suppose Congress wishes to reduce the budget deficit by reducing government spending. Use the AS-AD model to show what the impact will be of this change on GDP.the following macro mo det consumptron : c • C' +cYq and Ya = do posable income Desine d Investment: = I' +jY Government Expenditure s. G =G'+gy Exports = EX : X' IM =F' Imports Taxes : T:T't tY a) what is the equation for y" for this economy? b) Derive for this each of the following multipliers economy. ) Ke' 5) Kpi 2) k 6) Kx' 3) KG' 7) Kg8 "BB 4) Kpi 2 why Might one that the is argue 1 probably a 2 vavia b le g number ? hegathe
- 1. Use the Keynesian cross model to predict the impact on equilibrium GDP of the following. In each case, state the direction of the change and give a formula for the size of the impact. a. An increase in government purchases b. An increase in taxes c. Equal-sized increases in both government purchases and taxes1b. Use the Keynesian cross to predict the impact on equilibrium GDP of equal-sized increases in both government purchases and taxes.uèstion 21 pounts The economy is in a recession. The government enacts a policy to increase the real GDP by $10 billion. The MPS is 0.2. Assuming that the agggregate supply curve is horizontal across the range of GDP being considered, by how much should the government change spending or taxes in order to achieve its objective? Show your calculations. e For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). BIUS Paragraph Arial 10pt A v x X, Re v 55 OWORDS POWERED 図 田 lili 用
- Reductions in the personal income tax, often advocated by supply-siders to increase labor supply and effort, can be expected to also a. decrease consumption spending. b. increase export sales. c. increase consumption spending. d. decrease investment spending.OMAN'S ECONOMIC PROFILE The Sultanate of Oman has had extraordinary economic development since 2004, primarily due to the exploitation of its oil reserves. However, growth rates declined in 2019 to 0.5% as oil production remains capped by the OPEC production cut agreement, and also because of the slowdown in household consumption. As percentage of GDP, net exports account to roughly 12%. Oman has a relatively healthy economic and financial situation. Its government debt (estimated at 38.9% in 2019) is small compared to its gold and foreign currency reserves, although is expected to grow in the coming years. As of 2019, government expenditures as a part of GDP accounts to 24.9% (The World Bank, 2021). Oman Private Consumption contribution to GDP has an average share of 40.6 % (CEIC, 2020). The industrial sector accounts for 46.7% of GDP and employs 36.1% of the workforce (World Bank). Its share has increased considerably in the last two decades (employment in industries was as low as…K The following equations describe consumption, investment, government spending, taxes, and net exports in the country of Economika. In Economika, equilibrium GDP is equal to $. (Round your asnwer the nearest dollar.) If real GDP in Economika is currently $4,850, which of the following is true? A. There will be an unplanned decrease in inventories, and real GDP will increase next period. OB. There will be an unplanned increase in inventories, and real GDP will increase next period. OC. There will be an unplanned decrease in inventories, and real GDP will decrease next period. O D. There will be an unplanned increase in inventories, and real GDP will decrease next period. OE. There will be no unplanned change in inventories, and real GDP will stay the same next period. C=200+0.80(Y-T) 1=400 G=350 T=350 X = 100
- 1. Country X has following data: C = 20 + 0.8Y4, I = 30, G = 40, Tx = 20, T, = 15, X = 60, M = 20 + 0.04Y, incoming year growth target is 600, All figures is billion. Please calculate: a. National income equilibrium! b. Consumption and saving equilibrium! c. Government income from tax! d. How much change in government consumption if they want to achieve growth target?What is the relative importance of government spending (G) in aggreagte demand and some factors that affect it?The current state in the economy are as follows; Autonomous Consumption: 9000, Marginal Propensity to Consume: 0.4, Investment: 10000, Government Spending: 30000, Net Exports: 5000, Income Tax rate: 25%. The government wishes to conduct an injection into the economy to achieve a 45000 increase in national income. Calculated the current equilibrium income in the economy The government increases spending by 30000. Does this achieve the desired increase of 45000? How much should the government increase its spending to achieve the 45000 increase in national income (to the nearest whole number)? (Hint: consider the what the multiplier in this economy is)