Assume the following to answer the following questions: C= 1000+ .9 (Y-T) Tax rate = 0.1Y Imports = 0.1(Y-T) Government spending = 200 Investment = 300 Exports = 600 Potential Output = $8000What is the current GDP in this economy? Show your work.The economy described above is in the ? gap of the AD/AS Model.By how much must government spending increase or decrease to close this gap and bring the economy to Potential Output? Show your work

Assume the following to answer the following questions: C= 1000+ .9 (Y-T) Tax rate = 0.1Y Imports = 0.1(Y-T) Government spending = 200 Investment = 300 Exports = 600 Potential Output = $8000What is the current GDP in this economy? Show your work.The economy described above is in the ? gap of the AD/AS Model.By how much must government spending increase or decrease to close this gap and bring the economy to Potential Output? Show your work

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

The AD/AS graph illustrates an inflationary gap when the equilibrium level of real GDP is substantially to the left of potential GDP or the LRAS curve. substantially to the right of potential GDP or the LRAS curve. equal to full employment vertical
1. Use of discretionary policy to stabilize the economy Should policymakers use monetary policy, fiscal policy, or both in an effort to stabilize the economy? The following questions address the issue of how monetary and fiscal policies affect the economy and the pros and cons of using these tools to lessen economic fluctuations. The following graph shows a hypothetical aggregate demand curve (AD), short-run aggregate supply curve (AS), and long-run aggregate supply curve (LRAS) for the economy in April 2023. According to the graph, this economy is in To bring the economy back to the natural level of output, the government could use monetary or fiscal policy such as
Q1: There are two equations for macroeconomic equilibrium in an economy. State them. Show (mathematically) that Savings equals Investment when expenditure equals income. What type of economy would you have when exports equal imports? What happens to the savings-investment relationship if exports are not equal to imports? [This can be greater than or less than]. [Hint: See video lecture on Open Economy Macroeconomics]. Note: Ensure to write out full meanings when you use abbreviations or short forms. This is key to getting full marks.
John Maynard Keynes was the first to show that government policy could be used to change aggregate output and prevent recession by stabilizing the economy. Describe the economy at the time Keynes was writing. What parallels do you draw comparing that period with the current condition of the United States economy as a result of Covid?
Please answer fast please arjent help
Suppose that in 2011, Quarterville’s government cuts taxes. Show how this event will change equilibrium output and price level by shifting either the SRAS or AD curve.
Now assume you are examining a new economy. You learn that the mpc of this new economy is 0.75 and that the government wants to increase the level of output by $3000. What change in G achieves this desired change in Y? Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a $750 b $1500 $3000 d $12000
What is the relationship among the AD, SRAS and LRAS curves when the economy is in macroeconomic equilibrium?
Knowing that: The formula for economic impact is I(r)=(A)/1-r ---(i) The formula for impact change is ∆I= I'(r)*∆r ---(ii) The formula for percentage change in spending is g(r)=(r)/1-r ---(iii)
if the multplier in an economy is 2, a $10 billion increase in net exports will
If Saving+Tax+Import > Investment+Government spending+Export, then _____ must fall to establish macroeconomic equilibrium. Group of answer choices net exports gross exports taxes real GDP government spending
According to Keynes(Keynesian Macroeconomics), can the private sector always remove the economy from a recessionary gap? What would be the solution from a Christian perspective regarding people who cannot afford medical care?