Suppose full employment output equals $25 trillion and actual output equals $14 trillion. If crowding out is not an issue and the MPC equals 0.80, then government spending of ............will close the output gap. O $2.2 trillion $55 trillion $13.75 trillion $8.8 trillion.
Q: A French company imports goods with transaction value at EX-Works €8000, transport cost is €650 and…
A: Tariff refers that a taxation which is imposed by the government on goods and services , import…
Q: In the long run, what are the factors that will lead to lower interest rates? Elaborate answer in…
A: The interest rate is the cost at which commercial banks lend to the general public. With the loan…
Q: According to the textbook, which of the following statements is (are) correct? (x) As new firms…
A: Monopolistic competition is a mxiture of perfect competition and monopoly. This means there are many…
Q: Direction: Write T if the statement is correct, and F if the statement is incorrect. _____ 4. As a…
A: Since you have asked a question with multiple sub-parts, we will solve first three sub-parts for…
Q: Q4) Assume you administered a test in September and then again in November. You obtained a…
A: Correlation between two variables shows the relationship between the two variables. This shows how…
Q: Assume the aggregate demand and supply for a good are given by the following expressions: Q(p) =…
A: The equilibrium level must be achieved by equating the demand and supply curves. The imposition of…
Q: By definition, the Isocost lines represent: Select one: O a. the combinations of inputs that have…
A: In order to produce goods and services, different factors of production are required. These include…
Q: Use the following information to answer the two questions below. State of Prob, of the the economy…
A: * SOLUTION :- Given that ,
Q: Paulina sells beef in a competitive market where the price is $5 per pound. Her total revenue and…
A: Profit is the difference between total revenue and total cost. A perfectly competitive firm will…
Q: Please answer full questions including fill in the blanks.
A: When an initial injection into a circular flow results in a larger ultimate rise in real national…
Q: Define econometric in 200 words!
A: Econometrics refers to the use of statistical techniques to economic data in order to provide…
Q: Consider Q(L,K)= K. Suppose that the unit output price is $12, and the unit labor cost and the unit…
A: Given: Q(L,K)=K12L14 Price (P) = $12 Unit Labor cost (w) = $0.6 Unit Capital Cost (r) = $1.2
Q: Direction: Complete the table. Enumerate accordingly the 7 goals of Laudato Si' Enumerate…
A: Laudato Si' is the encyclical of the Pope francis. In this the pope criticizes about the…
Q: 3. Efficiency in the presence of externalities Roses confer many external benefits on society: the…
A: Equilibrium is where the demand curve equals supply curve. This means the equilibrium is where…
Q: Higher savings means a lower demand for goods and services. Use the DD-AA model with flexible…
A: DD-AA model studies the changes in the exchange rate due to changes in the aggregate demand of an…
Q: Exercise 1: Stackelberg model Suppose there are two firms, Firm 1 and Firm 2. Both firms have the…
A: Stackelburg model does recognise interdependence and take their decision simultaneously.
Q: Inefficiencies associated with majority voting may get resolved through: Select one: A. using the…
A: Voting is a process that a group, such as an electorate or gathering, may use to reach a consensus…
Q: The profit function for a company selling two mobile phone models is: π = 140Q₁-2Q₁²+…
A: Profit is the difference between total revenue and total cost. Profit = TR - TC Profit is…
Q: Calculate the GDP deflator and the rate of inflation for each year: (€ million) Nominal GDP Real GDP…
A: In economics, the GDP deflator is a measure of the money price of all new, domestically produced,…
Q: Kim and Abby are sisters who share a room. Their room can easily get messy, and their parents are…
A: A "prisoner's dilemma" occurs when individuals always have an incentive to make decisions that are…
Q: its short-run supply function is given by (a) q = 3Pw. (b) q = 3P/w. (c) q = P/(3w). (d) q = 3w/P.
A: In order to find the supply curve first and foremost there is a need to find the optimum amount of…
Q: Prominent Sdn Bhd produces furniture at several factories. Its Seberang Prai factory produces office…
A: The point at which a company's revenues and costs are equal is known as the break-even point. The…
Q: Which of the following are typically associated with higher wages or earnings? (Select all that…
A: Wages are directly related to the skills of the workers, their experience, and the type of jobs.…
Q: a market is characterized by a positive externality that is not the result of a technology…
A: Externalities are the harmful or beneficial side effects arise out of production or consumption of…
Q: Veronica's income is $4,000 a month. She deposits $800 in a saving account, buys $300 worth of…
A: Transaction demand for money: In economics and finance, the transaction demand for money is the sum…
Q: Consider the IV regression model Yi = β0 + β1Xi + β2Wi + ui, where Xi is correlated with ui and Zi…
A: A response, dependent, or the target variable may be described using a function that is provided by…
Q: U(x, y) = xayb A consumer maximises utility subject to a budget constraint M = Pxx+Pyy Where px is…
A:
Q: TABLE 1 PRICE ELASTICITY OF DEMAND FOR GOODS AND SERVICES Basket of goods and services Price…
A: Price Ceiling: Price ceiling refers to a situation when government imposes some price restrictions…
Q: The Federal Environmental Management Agency (FEMA) uses the Command and Control System of managing…
A: A command-and-control rule imposes strict limitations on pollution emissions and/or requires the…
Q: AN INVESTMENT OF P270,000.00 ON COMPUTER SHOP WILL HAVE THE FOLLOWING DATA: UNIFORM ANNUAL…
A: The yearly worth is the sum of all the advantages and expenses over the course of a year. The annual…
Q: Suppose the money market for some hypothetical economy is given by the following graph, which plots…
A: Money markets incorporate market sectors for such instruments as bank accounts, including term…
Q: 1. In a simple economy, people consume only 2 goods, food and cloning market basket of goods used to…
A: The Consumer Price Index measures the overall change in consumer prices based on a representative…
Q: What are the ethical issues of having increased automation in the workplace?
A: A moral dilemma that has to be resolved might occur in corporate refers to the ethical issue . In…
Q: Your money demand is the amount of money you wish to Group of answer choices earn per hour.…
A: Money demand refers to the desired holding of financial assets in the form of cash and deposits…
Q: If there are externalities leading to underproduction of a given good, command and control methods…
A: Introduction: Externalities: Costs or benefits that a producer creates but does not directly benefit…
Q: Question 11 Use the linear regression models above to answer this question. Estimate the fixed…
A: Using the given data, we ran a regression in excel with: Dependent Variable: Price Independent…
Q: Using the isoquant/isocost graph, the least cost input combination of producing a given output is…
A: Isocost curve is the curve whose all points shows the same cost. Isoquant curve is the set of all…
Q: An important consideration that entrepreneurs face in their decision making is their willingness to…
A: Enterpreneurship is one of the four factors of production. An enterpreneur applies his creative and…
Q: Question E3 Briefly explain how the appropriate tax moves the market to the social equilibrium.
A: Externality is the external cost or benefit that is borne by the third party. Positive externality…
Q: Refer to Figure 11.2. A decrease in nominal aggregate output, ceteris paribus, will likely Group of…
A: Money demand refers to people desires to keep their financial assets in the form of cash and demand…
Q: 9. Suppose now we want to minimize our expenditure while achieving a certain amount of utility. So…
A: To minimize the expenditure function, we need to use the lagrangian function. Given, Budget…
Q: The following table shows the approximate value of exports and imports for the United States from…
A: The difference between exports and imports is called trade balance. The trade balance is in surplus…
Q: Using the graph below, shade in the appropriate part of your graph that represents the total…
A: External cost is the cost that is not included in the price and is born by the third party. Given…
Q: What is the effect on China's aggregate demand when the United States goes into an expansionary…
A: Aggregate demand is the collective demand for goods and services made by all of the consumers within…
Q: Consider a remote town in which two restaurants, All-You-Can-Eat Café and GoodGrub Diner, operate in…
A: Consider a remote town in which two restaurants, All-You-Can-Eat Cafe and GoodGrub Diner, operate in…
Q: Suppose an American business owner purchases chocolates from Belgium in order to sell them in her…
A: The answer provided below has been developed in a clear step by step manner.
Q: A firm produces at an output level where the marginal products of labor and capital are both 50…
A: Marginal product is labor is the change in total cost due to an additional labor hired. Value of…
Q: eter's TV Supplies is considering a merger with Jan's Radio Supply Stores. Peter's total perating…
A: Average total cost is implied as the sum total of all production costs divided by the total quantity…
Q: 1.Find the firm's demand for inputs (as a function of output and the input prices) 2. Find the cost…
A: Supply function is a numerical portrayal of the association between the amount expected (quantity…
Q: Benefit–cost analysis requires the monetization of all relevant benefits and costs of a proposed…
A: A technique for calculating the value that a person places on something is called contingent…
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- Explain how automatic stabilizers work, both on the taxation side and on the spending side, first in a situation where the economy is producing less than potential GDP and then in a situation where the economy Is producing more than potential GDP.Explain the difference between the government purchases multiplier and the net tax multiplier. If the MPC falls, what happens to the tax multiplier?Why is spending by the U.S. government on scientific research at NASA fiscal policy while spending by the University of Illinois is not fiscal policy? Why is a cut in the payroll tax fiscal policy whereas a cut in a state income tax is not fiscal policy?
- What is the main advantage of automatic stabilizers over discretionary fiscal policy?Suppose that the MPC is 0,80 and there is an AD excess of $1,200 million. Which of the following is an appropriate desired fiscal restraint? O $240 million decrease in government spending. $1.200 million decrease in government spending. O S1,500 million decrease in government spending. $960 million decrease in government spending.TRUE - OR - FALSE Crowding out occurs when an increase in government spending leads to declines in consumption, investment, and net exports. O True O False
- ineim Suppose the government decide to use fiscal policy to close the output gap. The marginal propensity to consume is 0.6 and the output GDP is $150 million Çalculate the minimum change in government spending required to close this output GDP16. If consumers in a country spend 4/5 of their disposable income. If their governmentdecreases its spending by 55 trillion and in order to maintain a balanced budgetsimultaneously decreases taxes by 55 trillion. Calculate the effect of the 55 trillion change ingovernment spending and 55 trillion change in taxes on the country’s aggregate demand.suppose the government wishes to illuminate recess or a gap of 100 billion in the MPC is .075 how much must’ve government increase in spending instead of increasing government spending by the amount you calculated what would be the effect of the government decreasing taxes by this amount explain?
- a) Suppose that there are no crowding-out effects and the MPC is 0.8. By how much must the government increase expenditures shift the aggregate-demand curve right $10 billion? b. The model of Long-run Growth, proposes that fiscal policy can have lasting effects on savings, investment, and economic growth. On the other hand, the model of Aggregate Demand-Aggregate Supply suggests that the only long run effect of fiscal policy is an increase in the price level. How could you use the Aggregate Demand and Aggregate Supply model for a more accurate description of the short-run and long-run effects of an increase in government spending? Could you distinguish between different uses of government expenditures to predict their effects on prices and output?Refer to the accompanying table for Waxwania. Government Expenditures, G Tax Revenues, T Real GDP $190 100 $500 190 120 600 190 140 700 190 160 800 190 180 900 a. What is the marginal tax rate in Waxwania? ____percent --The average tax rate? _____percent b. Suppose Waxwania is producing $600 of real GDP, whereas the potential real GDP (or full-employment real GDP) is $700.-How large is its budget deficit? $____ -Its cyclically adjusted budget deficit? $____ -Its cyclically adjusted budget deficit as a percentage of potential real GDP?________ percentWhat is marginal propensity to consume and marginal tax rate? Why is the gov expenditure multiplier is 4.8?