Refer to columns 1 and 6 in the table below. a. Incorporate government into the table (in the gray-shaded cells) by assuming that it plans to tax and spend $20 billion at each possible level of GDP. Also assume that the tax is a personal tax and that government spending does not induce à shift in the private aggregate expenditures schedule. Instructions: Enter your answers as a whole number. (2) Aggregate Expenditures, Private Closed Economy, Billions (6) Aggregate Expenditures, Private Open Economy, Billions (7) Government Expenditures, Expenditures Billions (8) Aggrega (1) Real Domestic Output (GDP = DI), Billions (3) Exports, (4) Imports, (5) Net Exports, Billions Billions Billions Economy wi Government, Bi $200 $240 $20 $30 $-10 $230 250 280 20 30 -10 270 300 320 20 30 -10 310 350 360 20 30 -10 350 400 400 20 30 -10 390 450 440 20 30 -10 430 500 480 20 30 -10 470 550 520 20 30 -10 510 What is the change in equilibrium GDP caused by the addition of government? 20 billion

Refer to columns 1 and 6 in the table below. a. Incorporate government into the table (in the gray-shaded cells) by assuming that it plans to tax and spend $20 billion at each possible level of GDP. Also assume that the tax is a personal tax and that government spending does not induce à shift in the private aggregate expenditures schedule. Instructions: Enter your answers as a whole number. (2) Aggregate Expenditures, Private Closed Economy, Billions (6) Aggregate Expenditures, Private Open Economy, Billions (7) Government Expenditures, Expenditures Billions (8) Aggrega (1) Real Domestic Output (GDP = DI), Billions (3) Exports, (4) Imports, (5) Net Exports, Billions Billions Billions Economy wi Government, Bi $200 $240 $20 $30 $-10 $230 250 280 20 30 -10 270 300 320 20 30 -10 310 350 360 20 30 -10 350 400 400 20 30 -10 390 450 440 20 30 -10 430 500 480 20 30 -10 470 550 520 20 30 -10 510 What is the change in equilibrium GDP caused by the addition of government? 20 billion

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter11: Fiscal Policy

Section: Chapter Questions

Problem 19E

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