Homework Help is Here – Start Your Trial Now!
Business
Economics
29. If full-employment real GDP in this economy is $3,500 billion, how much of an increase in government spending would be necessary to achieve equilibrium at full employment, given the simplifying assumptions of the Keynesian model? $300 billion $450 billion $100 billion $75 billion a. b. C. d.

29. If full-employment real GDP in this economy is $3,500 billion, how much of an increase in government spending would be necessary to achieve equilibrium at full employment, given the simplifying assumptions of the Keynesian model? $300 billion $450 billion $100 billion $75 billion a. b. C. d.

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
See similar textbooks
icon
Related questions
Question
How do I answer 29?
**Transcription for Educational Website** **Economic Analysis Questions** **28. If full-employment (natural) real GDP in this economy is equal to $3,500 billion, then:** a. the economy is at full-employment equilibrium. b. a recessionary gap exists. c. an inflationary gap exists. d. this economy can never achieve full employment. **29. If full-employment real GDP in this economy is $3,500 billion, how much of an increase in government spending would be necessary to achieve equilibrium at full employment, given the simplifying assumptions of the Keynesian model?** a. $300 billion b. $450 billion c. $100 billion d. $75 billion **30. If full-employment real GDP in this economy is $3,500 billion, how much of a decrease in taxes would be necessary to achieve equilibrium at full employment, given the simplifying assumptions of the Keynesian model?** a. $300 billion b. $450 billion c. $100 billion d. $75 billion **31. What is the maximum change in equilibrium real GDP that could occur as result of a one-time $50 billion tax cut if the MPC is 0.75?** a. $200 billion decrease b. $200 billion increase c. $150 billion decrease **Explanation for Diagrams/Charts:** There are no diagrams or charts included in this section. The questions are designed to assess understanding of economic principles related to GDP, government spending, taxation, and the Keynesian economic model. Students are expected to calculate necessary changes in fiscal policy to achieve full employment and the impact of a tax cut based on the marginal propensity to consume (MPC).
Transcribed Image Text:**Transcription for Educational Website** **Economic Analysis Questions** **28. If full-employment (natural) real GDP in this economy is equal to $3,500 billion, then:** a. the economy is at full-employment equilibrium. b. a recessionary gap exists. c. an inflationary gap exists. d. this economy can never achieve full employment. **29. If full-employment real GDP in this economy is $3,500 billion, how much of an increase in government spending would be necessary to achieve equilibrium at full employment, given the simplifying assumptions of the Keynesian model?** a. $300 billion b. $450 billion c. $100 billion d. $75 billion **30. If full-employment real GDP in this economy is $3,500 billion, how much of a decrease in taxes would be necessary to achieve equilibrium at full employment, given the simplifying assumptions of the Keynesian model?** a. $300 billion b. $450 billion c. $100 billion d. $75 billion **31. What is the maximum change in equilibrium real GDP that could occur as result of a one-time $50 billion tax cut if the MPC is 0.75?** a. $200 billion decrease b. $200 billion increase c. $150 billion decrease **Explanation for Diagrams/Charts:** There are no diagrams or charts included in this section. The questions are designed to assess understanding of economic principles related to GDP, government spending, taxation, and the Keynesian economic model. Students are expected to calculate necessary changes in fiscal policy to achieve full employment and the impact of a tax cut based on the marginal propensity to consume (MPC).
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Government Spending
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.
Recommended textbooks for you
ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
Economics
ISBN:
9780190931919
Author:
NEWNAN
Publisher:
Oxford University Press
Principles of Economics (12th Edition)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS