An economy is experiencing a high rate of inflation. The government wants to reduce consumption by $36 billion to reduce inflationary pressure. The MPC is 0.75. By how much should the government raise taxes to achieve its objective? A. $6 billion B. $12 billion C. $16 billion D. $9 billion
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An economy is experiencing a high rate of inflation. The government wants to reduce consumption by $36 billion to reduce inflationary pressure. The MPC is 0.75. By how much should the government raise taxes to achieve its objective?
A. $6 billion
B. $12 billion
C. $16 billion
D. $9 billion
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- An economy is experiencing a high rate of inflation. The government wants to reduce consumption by $36 billion to reduce inflationary pressure. The MPC is 0.8 By how much should the government raise taxes to achieve its objective? A. $9 billion B. $28 billion C. $7 Billion D. $180 BillionEconomics An economy is experiencing a high rate of inflation. The government wants to reduce GDP by $80 billion to reduce inflationary pressure. The MPC is .8. By how much should the government raise taxes to achieve its objective? Multiple Choice $9 billion $16 billion $20 billion $12 billionAn economy is experiencing a high rate of inflation. The government wants to reduce consumption by $60 billion to reduce inflationary pressure. The MPC is 0.75. By how much should the government raise taxes to achieve its objective? Multiple Choice: Choose one. - $80 billion - $45 billion - $60 billion - $240 billion
- Macroeconomics question: In an economy, the government wants to increase aggregate demand by $50 billion at each price level to increase real GDP and reduce unemployment. If the MPS is 0.4, then it could increase government spending by: A. $20 billionB. $10 billionC. $40.50 billionD. $31.25 billion10. If there is an inflationary gap of $400 Billion and the MPS is .2, how much would taxes have to increase to close the gap? acer11. How do lower taxes affect aggregate demand? A) They increase disposable income, consumption, and aggregate demand. B) They reduce disposable income, consumption, and aggregate demand. C) They decrease corporate investment and aggregate demand. D) They increase aggregate supply and thus increase aggregate demand as well 12. Full-employment GDP is also known as A) realized GDP. B) potential GDP. C) politico-economic GDP. D) balanced-budget GDP.
- 24. Which of the following is used as a remedial measure during a recession in an economy? a.Decrease taxes and increase government spending b.Increase taxes and government spending c.Decrease taxes and government spending d.Increase taxes and decrease government spendingWhen taxes increase, consumption _____, business investment ______, and real GDP output ______. A. decreases shifting aggregate demand left; decreases shifting aggregate supply left; decreases reducing economic growth, and lowering the standard of living. B. increases shifting aggregate demand right; increases shifting aggregate supply right; increases resulting in sustained economic growth, and a higher standard of living. C. decreases shifting aggregate demand left; decreases shifting aggregate supply left; increases resulting in sustained economic growth, equality and prosperity for all. D. None of the answers are correct.Which of the following fiscal policy actions would be appropriate if the economy is experiencing an recessionary gap? OA. a decrease in government spending B. a decrease in the money supply C. an increase in interest rates D. a decrease in taxes
- 21. If taxes a. increase, then consumption increases, and aggregate demand shifts leftward. b. increase, then consumption decreases, and aggregate demand shifts rightward. c. decrease, then consumption increases, and aggregate demand shifts rightward. d. decrease, then consumption decreases, and aggregate demand shifts leftward.The government of Osiris believes in balancing its budget over a seven-year cycle. Over the first six years, it has maintained its spending at $200 billion and its MTR at 0.25. (There are no autonomous taxes in Osiris). Column 2 of the table below shows the level of GDP in each of the first six years in the cycle. a. Complete the table below. Round your answers to nearest whole number. (4) (1) Year (2) GDP (3) Tax Revenue Government (5) Deficit/Surplus Spending ($billion) ($ billion) ($billion) 1 800 200 2 760 200 740 200 4 825 200 820 200 825 200 Suppose that the estimated level of GDP in Year 7 is projected to be $800. b. What level of government spending (assuming no change in the tax rate) for the government of Osiris to end the seven-year cycle with its budgetary goal on target? Government spending would have to be $ c. Alternatively, what should the new tax rate be (assuming no change in government spending) for the government of Ran to end the seven-year cycle with its budgetary…4. In the New-Keynesian model where government expenditure is financed through taxation only, if government expenditure increases by 100, which of the following is true? A. Income will increase by 100. B. Income will increase by more than 100 as the fiscal multiplier is greater than 1. C. Income will not change as the increase in government expenditure would crowd out private consumption. D. Income will increase, but we can't say by how much.