Refer to Figure. If the economy starts at c and 1, then in the short run, where does a decrease in taxes move the economy? Price Level *2 d and 2 Oe and 3 a and 3 b and 2 Output Inflation Rate 2 Unemployment
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- If the government got rid of sales tax, how might this affect the market? shift AD to the right shift SRAS to the right shift AD to the left shift SRAS to the leftWhich of the following will raise consumer expenditures, C? Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a b с d a general increase in housing prices. an increase in interest rates. an increase in expected future income. an increase in the price level.Agricultural price supports result in governments holding large inventories of agricultural products. Why do you think the government cannot simply give the products away to poor people?
- COMPUTE FOR MP AND AP. EXPLAIN.Imagine there is a consumption smoother (also known as a PIH consumer) who expectsto live for another 40 years and to work for another 30 years. They just learned thatthey will receive a permanent pay increase from their job of $800. How much extra dothey consume this year? What is their marginal propensity to consume?Assume an economy operates in the intermediaterange of its aggregate supply curve. State thedirection of shift for the aggregate demandor aggregate supply curve for each of thefollowing changes in conditions. What is theeffect on the price level? On real GDP? Onemployment?a. The price of crude oil rises significantly.b. Spending on national defense doubles.c. The costs of imported goods increase.d. An improvement in technology raises laborproductivity.
- Refer to the dlagram glven below. Consumption Income The diagram given above shows consumptlon schedules. As Income rises, the marginal propensity to consume remains constant for. Multiple Cholce only C3- O only C. C2, ano C3. none of the consumption schedules. Drov 17ot 72 NextIllustrate and interpretthe short-run andlong-run aggregatesupply curvesWhat is the macroeconomic equilibrium? The macroeconomic equilibrium is real GDP of $ ___ trillion and a price level is ___. SS attached thanks
- 14. The economy is experiencing a $225 million inflationary gap. If the government 02 decided to solve this macroeconomic disequilibrium using a change in taxes, would you recommend an increase or decrease in taxes? If the MPC=0.9, what magnitude of tax change would be appropriate?What is the relative importance of government spending (G) in aggreagte demand and some factors that affect it?Explain why the following statements are false.a. “The aggregate-demand curve slopes downwardbecause it is the horizontal sum of the demandcurves for individual goods.”b. “The long-run aggregate-supply curve is verticalbecause economic forces do not affect long-runaggregate supply.”