4. Based on the answer to the previous question (question #3), if half of those government expenditures are financed through  lump sum taxes,  calculate the new level if NI? (C+I+G)

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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PLEASE ONLY ANSWER QUESTION FOUR  (i am giving you the others as context) (i need this by 11:55pm tonight, so in like 25 minutes,  so please hurry!!) 

ANSWER THIS ONE:

4. Based on the answer to the previous question (question #3), if half of those government expenditures are financed through  lump sum taxes,  calculate the new level if NI? (C+I+G)

 

HERE ARE THE FIRST THREE QUESTIONS AS CONTEXT: 

1. Calculate the MPC  in the above diagram.

2. Based on Diagram 1, If private Investment of $100 is added to the existing C, calculate the new equilibrium level of NI.

3. Given your answer to the previous question (question #2) calculate by how much G should change, if the full employment level in the economy is at $3000.

Expert Solution
Step 1

4) The government expenditure should be increased by 75. Half of this is financed by taxes. The taxes are 37.5. Remaining government expenditure is 37.5

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