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12:04 PM Sat Aug 10 Mc Hill Hh LTI Launch Reader Available Step 2-Fiscal Policy Homework 3 6.66 points Saved The graph below depicts an economy where an increase in aggregate demand has caused inflation. Assume the government decides to conduct fiscal policy by changing taxes to bring inflation under control. Print References Graph Summary Price Level 160 140 120 100 80 60 40 0 Fiscal Policy 100 200 300 400 500 600 700 800 Real GDP (billions of dollars) Instructions: Enter your answer as a whole number. If you are entering a negative number include a minus sign a. How much does aggregate demand need to change to restore the economy to its long-run equilibrium? billion b. If the MPC is 0.75, how much do taxes need to change to shift aggregate demand by the amount you found in part a? $ billion Suppose instead that the MPC is 0.667. c. How much does aggregate demand and taxes need to change to restore the economy to its long-run equilibrium? billion and taxes need to change by $1 Aggregate demand needs to change by $ billion. # % 2 3 4 5 6 E 7 B

12:04 PM Sat Aug 10 Mc Hill Hh LTI Launch Reader Available Step 2-Fiscal Policy Homework 3 6.66 points Saved The graph below depicts an economy where an increase in aggregate demand has caused inflation. Assume the government decides to conduct fiscal policy by changing taxes to bring inflation under control. Print References Graph Summary Price Level 160 140 120 100 80 60 40 0 Fiscal Policy 100 200 300 400 500 600 700 800 Real GDP (billions of dollars) Instructions: Enter your answer as a whole number. If you are entering a negative number include a minus sign a. How much does aggregate demand need to change to restore the economy to its long-run equilibrium? billion b. If the MPC is 0.75, how much do taxes need to change to shift aggregate demand by the amount you found in part a? $ billion Suppose instead that the MPC is 0.667. c. How much does aggregate demand and taxes need to change to restore the economy to its long-run equilibrium? billion and taxes need to change by $1 Aggregate demand needs to change by $ billion. # % 2 3 4 5 6 E 7 B

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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12:04 PM Sat Aug 10 Mc Hill Hh LTI Launch Reader Available Step 2-Fiscal Policy Homework 3 6.66 points Saved The graph below depicts an economy where an increase in aggregate demand has caused inflation. Assume the government decides to conduct fiscal policy by changing taxes to bring inflation under control. Print References Graph Summary Price Level 160 140 120 100 80 60 40 0 Fiscal Policy 100 200 300 400 500 600 700 800 Real GDP (billions of dollars) Instructions: Enter your answer as a whole number. If you are entering a negative number include a minus sign a. How much does aggregate demand need to change to restore the economy to its long-run equilibrium? billion b. If the MPC is 0.75, how much do taxes need to change to shift aggregate demand by the amount you found in part a? $ billion Suppose instead that the MPC is 0.667. c. How much does aggregate demand and taxes need to change to restore the economy to its long-run equilibrium? billion and taxes need to change by $1 Aggregate demand needs to change by $ billion. <Prev 3 of 15 Next > # % 2 3 4 5 6 E 7 B
Transcribed Image Text:12:04 PM Sat Aug 10 Mc Hill Hh LTI Launch Reader Available Step 2-Fiscal Policy Homework 3 6.66 points Saved The graph below depicts an economy where an increase in aggregate demand has caused inflation. Assume the government decides to conduct fiscal policy by changing taxes to bring inflation under control. Print References Graph Summary Price Level 160 140 120 100 80 60 40 0 Fiscal Policy 100 200 300 400 500 600 700 800 Real GDP (billions of dollars) Instructions: Enter your answer as a whole number. If you are entering a negative number include a minus sign a. How much does aggregate demand need to change to restore the economy to its long-run equilibrium? billion b. If the MPC is 0.75, how much do taxes need to change to shift aggregate demand by the amount you found in part a? $ billion Suppose instead that the MPC is 0.667. c. How much does aggregate demand and taxes need to change to restore the economy to its long-run equilibrium? billion and taxes need to change by $1 Aggregate demand needs to change by $ billion. <Prev 3 of 15 Next > # % 2 3 4 5 6 E 7 B
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