24. Using the macroeconomic data in #21 above and assuming (i) a full employment economic output of $900 (Be careful: Not $800 anymore!) and (ii) due to budget constraint Congress could only authorize an increase of government spending in the amount of $5 - no more or no less than that!. Now you as the government's chief economic advisor, you will have to compute the amount of taxes that need to be cut to close up the remaining GDP gap. Government now needs to reduce taxes by --_ to close up the remaining GDP gap. $1.25 $1.75 $1.67 $1.50 cannot be computed based on information provided

24. Using the macroeconomic data in #21 above and assuming (i) a full employment economic output of $900 (Be careful: Not $800 anymore!) and (ii) due to budget constraint Congress could only authorize an increase of government spending in the amount of $5 - no more or no less than that!. Now you as the government's chief economic advisor, you will have to compute the amount of taxes that need to be cut to close up the remaining GDP gap. Government now needs to reduce taxes by --_ to close up the remaining GDP gap. $1.25 $1.75 $1.67 $1.50 cannot be computed based on information provided

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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5) What factors will shift the aggregate demand curve for a given level of real domestic income?
A-What is the equilibrium price and quantity for this economy? B-is this economy operating above or below potential output? What is the gdp gap( actual gdp-potential gdp)
1. Let us say the estimated equation for the economy's aggregate demand is Y=400 – 15P+ 8G And the estimated equation for the economy's aggregate supply is Y=5+11P-10W where Y is the country's real GDP, P is the price level (GDP deflator), G is government purchases of goods and services, and W is the index of wages. a. If G= 160 and W= 100, find the equilibrium real GDP and the price level in the economy. b. What is the simple multiplier in this economy? Give the number and explain how you figured it out. c. What is the inflation rate due to the government increasing its purchases from G=160 to G= 180 (expansionary fiscal policy), in %? d. What is the value of the multiplier when the price level varies? 2. Imagine an economy in which the slope of the AD curve is equal to the (negative of) slope of the AS curve. If the simple multiplier is equal to 5, what is the value of the multiplier when the price level varies? Give the number and explain how you figured it out.
Other things remain unchanged, a country's Aggregate Demand is made up of $100 billion of consumption, $40 billion of investment, $10 billion of net exports, and $20 billion of government purchases. Full-employment GDP is $200 billion. To obtain full employment under these conditions, the government should: Select one: a.increasing corporate income taxes to discourage private domestic investment. b.reduce tax rates and/or increase government spending. c.increasing interest rate on government bonds to encourage personal saving.
Consider the following hypothetical data for the U.S. economy in 2020 (in trillions of dollars), and assume that there are no statistical discrepancies, zero net incomes earned abroad, and zero taxes on production and imports of net subsidie Category Value $1.3 Category Value Corporate profits before taxes deducted Proprietorial income Rent Interest $2.6 Exports 0.8 Net transfers and interest earnings 0.8 Nonincome expense items 0.8 Imports 8.1 Corporate taxes 1.2 Social security contributions 11.7 Government spending 1.9 1.6 1.7 Wages Depreciation Consumption 0.6 2.2 1.7 a. Calculate the gross domestic income. $ 14.7 trillion. (Enter your response rounded to one decimal place.) Calculate GDP. $ 14.7 trillion. (Enter your response rounded to one decimal place.) b. Calculate gross private domestic investment. $ 13 trillion. (Enter your response rounded to one decimal place.)
QUESTION 6 Refer to the table. If the full-employment real GDP is $100, the: Consumption (after taxes) $-20 Real GDP Government Purchases $15 Gross Investment Net Exports $0 $10 $+5 10 10 +5 15 40 20 10 +5 15 70 40 10 +5 15 60 80 100 inflationary expenditure gap is $30. 100 10 +5 15 130 10 +5 15 160 10 +5 15 inflationary expenditure gap is $10. recessionary expenditure gap is $30. recessionary expenditure gap is $10. O hyper recessionary expenditure gap is $100. O O O C
4. The foreign sector is added to the Keynesian national income model and there is a positive marginal propensity to import. X is the export and Z (in capital letter) is the import and C (in capital letter) is the consumption. Y = C+1+G+ (X – Z) C = c+ bY Z = z + mY Find: (i) The equilibrium level of income, consumption and import (ii) Specify the ranges of b and m and give the economics interpretations (iii) Identify the endogenous and exogenous variables from the model
Imagine that a group of advisors to the president has suggested providing a tax cut for the middle class in order to stimulate the economy and reduce unemployment. The president has asked for your analysis of this proposed tax cut. Post your thoughts both as an economic scientist and economic policy advisor. Read the scenario and, respond to the following: Describe how an economic scientist would approach the tax cut recommended by the advisors in the scenario you just read. What are some economic factors that the economic scientist would consider when crafting his or her statement on the tax cut proposed? Describe how an economic policy advisor would approach the same tax cut and provide the reasoning behind the position. Remember to think like an economist scientist and economic policy advisor when you write your post, even if it goes against your own opinions about whether a tax cut is a good idea. To guide your responses, consider the following questions: What economic…
Please dear expert hand written is not allowed.
5. The Current U.S. government spending is $4.746 trillion. That's the federal budget for fiscal year 2020 covering October 1, 2019, to September 30, 2020. It's 21% of gross domestic product. That means that Government Spending in the United States has increased under the current U.S. Administration. Additionally, last year the Congress passed a tax reform that, among other effects, cut payroll taxes: i) Can you establish the macroeconomics effects of these policies on consumption, investment, interest rate and savings? Use the models (consumption model and loanable funds market) and the graphs. Explain.