6. Fill in the blanks below: Initial Change G 1 C Taxes ↑ M 1X Transfer ayments Initial Amount $30 billion $10 billion $10 billion $10 billion $20 billion MPC .9 .8 .75 .9 Maximum Change $60 billion ↑$200 billion 1$80 billion 1$50 billion Initial Change ↓G TC Taxes ↑ 1 ↑ M ↑ X ↑ Transfer

6. Fill in the blanks below: Initial Change G 1 C Taxes ↑ M 1X Transfer ayments Initial Amount $30 billion $10 billion $10 billion $10 billion $20 billion MPC .9 .8 .75 .9 Maximum Change $60 billion ↑$200 billion 1$80 billion 1$50 billion Initial Change ↓G TC Taxes ↑ 1 ↑ M ↑ X ↑ Transfer

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Figure 41 Type Current Rate Frictional 2.1 Structural 2.2 Cyclical 2.5 Using Okun's Law and the data in figure 41, if potential output is $550 billion and the marginal propensity to consume for this economy is equal to 80-percent, a proper fiscal policy response would be to: Oa. Increase taxes by $5.5 billion. O b. decrease government expenditures by $5.5 billion. Oc increase government expenditures by $11 billion. O d. decrease taxes by $11 billion.
14. Suppose that Korea has been in recession and many economists have concerns about the long-term recession. Therefore, the Bank of Korea and the government are preparing stimulus packages for the economy. (1) Using both AA and DD curves, describe the effect of the government’s temporarily expansionary fiscal policy on the change of equilibrium of national output and foreign exchange rate. (2) The Korean government decides to annually spend an extra budget on constructing and maintaining social infrastructure forever. Using both AA and DD curves, describe the impact of the government’s policy on the change of equilibrium of national output and foreign exchange rate.
QUESTION 1 A new machine is to be purchased for $200,000. The company believes it will generate $75,000 annually in revenue due to the purchase of this machine. The company will have to train an operator to run this machine and this will result in additional labor expenses of $25,000 annually. The new machine will be depreciated using 5 years MACRS, even though the life of the project is 7 years, and the salvage value is estimated to be $0 at the end of year 7. The tax rate is 40% and the company's MARR is 15%.
6. Use the following table to answer these questions: Y C I G X $ 500 $ 500 $ 10 $ 20 $ 60 $ 600 $ 590 $ 10 $ 20 $ 40 $ 700 $ 680 $ 10 $ 20 $ 20 $ 800 $ 770 $ 10 $ 20 $ 0 $ 900 $ 860 $ 10 $ 20 - $ 20 $ 1,000 $ 950 $ 10 $ 20 - $ 40 a.What is the Marginal Propensity to Import? b.What is the Marginal Propensity to Invetst? c.What the difference between both of…
The correctly calculated taxes due on a corporate taxable income of $13,000,000 are closest to which of the following? a. $2,730,000 b. $3,250,000c. $3,750,000 d. $4,200,000.
A Moving to another question will save this response. Question 23 Fiscal policy can move us to equilibrium at Full Employment by O a. these are all possible fiscal policies to bring us to full employment. O b. bailing out troubled industries with special subsidies like the "paycheck protection" during the pandemic. O c. making changes in G, net government spending. O d. changing tax rates people have to pay. A Moving to another question will save this response. tab 1 Q ABA 2 W E R T
CIENCES QUESTION 1 Study the bar chart regarding the National Budget's tax revenue and answer the questions that follow: WHERE WILL THE MONEY COME FROM IN 2021/22 AND HOW WILL IT BE SPEND GOVERNMENT SOURCES OF REVENUE 2021/22 Tax R1 365.1milj 72.6% Loans R 482.6milj 25.7% Non-tax income R 32.5milj 1.7% 1 Which revenue contributes the most to the National Budget? Give the percentage. Which revenue contributes the least to the National Budget? Give the percentage. Give ONE example of a income that is not tax. TAX REVENUE, 2 021/22 Personal inseme tax
2. Discretionary fiscal policy Suppose the economy had been producing at potential output but is now producing above it. Which of the following are discretionary fiscal policies that could bring the economy closer to potential output? Check all that apply. ооо Additional spending on bridge repairs A reduction in spending on new road construction A tax cut A tax increase In the preceding scenario, is the discretionary fiscal policy needed to bring the economy closer to potential output an example of expansionary fiscal policy or contractionary fiscal policy? Expansionary Contractionary
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10. Agreements and disagreements among economists regarding fiscalpolicy Consider a hypothetical economy in which households spend $0.75 of each additional dollar of their after-tax income. The expenditure multiplier for this economy is Suppose that this economy is experiencing a recession. The government would like to stimulate aggregate demand and is deciding whether it should increase its spending by $1 billion or reduce income tax by $1 billion. Assume other things remain constant, and the marginal propensity to consume remains at 0.75. Before any multiplier effect takes place, a $1 billion increase in government spending will increase the aggregate demand by s $1 billion reduction in income tax will increase the aggregate demand by billion, while a billion. Now consider the effect of each fiscal policy after the multiplier effect is complete. A $1 billion increase in government spending will result in a total increase of aggregate demand by $ billion, whereas a $1 billion…
2. Explain the aspects of expansionary and contractionary fiscal policy. During which phases of the business cycle would each be appropriate? Expansionary fiscal policy refers to (increases, decreases) in government spending or (increases, decreases) in taxes or both, so that the net effect on aggregate demand (AD) is an increase in net government spending (G). Contractionary fiscal policy is the opposite: a(n) (increase, decrease) in government spending or (increase, decrease) in taxes or both, so that the net effect on aggregate demand is a decrease in net government spending. Expansionary policy would most likely be used during a r A contractionary policy would most likely be employed near the (peak, trough ) of the business cycle as the economy reaches full-employment GDP and the potential for inflation accelerates. or (peak, trough ) phase.