C. What is the value of tax multiplier in this economy?.d. By how much will equilibrium income in the goods market increase if thegovernment decides to increase its purchases by PhP 13,500?Assume that the tax rate is still 12%. Can government expenditure helpincrease output in the economy? Suppose the households in a hypothetical economy has the followingconsumption functionC = 1200+ 0.85Y,dWhere Y is the disposable income. The government in this economy imposes a taxdrate of0 < t < 1 to households' income (ex. A t = 0.10 means that 10% of households'income goes to tax payments).

Aggregate demand (AD)= C (private consumption expenditure)+ I (private investment expenditure)+ G…

C. What is the value of tax multiplier in this economy?. d. By how much will equilibrium income in the goods market increase if the government decides to increase its purchases by PhP 13,500 ? Assume that the tax rate is still 12%. Can government expenditure help increase output in the economy ?

C. What is the value of tax multiplier in this economy?. d. By how much will equilibrium income in the goods market increase if the government decides to increase its purchases by PhP 13,500 ? Assume that the tax rate is still 12%. Can government expenditure help increase output in the economy ?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

C. What is the value of tax multiplier in this economy?.
d. By how much will equilibrium income in the goods market increase if the
government decides to increase its purchases by PhP 13,500
?
Assume that the tax rate is still 12%. Can government expenditure help
increase output in the economy
?

Suppose the households in a hypothetical economy has the following
consumption function
C = 1200+ 0.85Y,
d
Where Y is the disposable income. The government in this economy imposes a tax
d
rate of
0 < t < 1 to households' income (ex. A t = 0.10 means that 10% of households'
income goes to tax payments).

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Consider the ol owing information for a closed economy. Consumption 400+0.6(Y-T) Таxes 500 Investment S ending 750 Government Expenditures 350 What is the valueof tax multiplier for this economy? Lütfen birini sxçin: О а. 2.5 O b.-2 O C.-1 O d. 1.5 O e. 2 O f.1 O g. -2.5 O h.-1.5
3. You are given the following information about an economy: o Investment spending is 400 o Government spending is 600 o A trade deficit of 250 exists o Autonomous consumption is 300 o The mpc is 0.70 o A lump sum tax of 275 is imposed Given this information, please write the aggregate expenditures function.
Suppose a given hypothetical economy has the following values. GDP-520 Billion, Consumption =$13 Billion; Govermment Purchase-$4 Billion; and Budget Surplus = $1 Billion How much is the public saving? OA S5 Bilion OB $4 Blion OC.52 Billion OD-$1 Billion OE S1 Billion OF $3 Billion
6. Assume that a hypothetical economy with an MPC of 0.75 is experiencing severe recession. By how much would government spending have to rise to shift the aggregate demand curve rightward by $35 billion? How large a tax cut would be needed to achieve the same increase in aggregate demand? Determine one possible combination of government spending increases and tax increases that would accomplish the same goal without changing the amount of outstanding debt.
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Please see attachment Answer neatly Show all your work. Based on the above diagram: 1. Calculate MPC? 2. If Private Investment increases by 100, calculate the new level of NI. 3. If full-employment NI is at 3000, by how much should Government spending change? 4. What is the new NI, If 1/2 of those government expenditures are financed through taxes?
2. Assuming that the aggregate price level is constant, the interest rate is fixed, and there are no taxes and no foreign trade, what will be the change in GDP if the fol- lowing events occur? a. There is an autonomous increase in consumer spending of $25 billion; the marginal propensity to consume is 2/3. b. Firms reduce investment spending by $40 billion; the marginal propensity to consume is 0.8. c. The government increases its purchases of military equipment by $60 billion; the marginal propensity to consume is 0.6.
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6
Pls help with below homework.
Assume that taxes depend on income and the MPC is 0.8 and tis 0.4. An increase in taxes of $10 billion will decrease equilibrium income by Select one: O a. $15.4 billion. O b. $25 billion. O c. $19.2 billion. O d. $27 billion.