Consider an economy in which the government wants to do tight (contractionary) fiscal policy by changing taxes by $4000.  If the average citizen spends 80 percent of each dollar of income, what will be the total effect on output Y? Carefully follow all numeric directions. Use a negative number (with negative sign) to depict an increase in Y and a positive number (no sign) to depict a decrease.

Q: A country has a rate of growth (g) of 0.75 %, a debt-to-income of 94% and a primary deficit of 0.9%…

A: The percentage change within the value of all products and services produced in a very country over…

Q: Qs 4: What is the meaning of the term ‘tax expenditure’?

A: The term 'tax expenditure' refers to the revenue that the government forgoes through the provision…

Q: ) If at the beginning of the year the public debt is $20 trillion, government spending and transfers…

A: The public debt is the borrowing of public authorities. The government can take loans from…

Q: Hi hlo Expert pro Hand written solution is not allowed.

A: Approach to solving the question: Detailed explanation:To calculate the new total expenditure at GDP…

Q: MULTIPLE CHOICE QUESTIONS1. Which of the following is a category of fiscal policy?A) government…

A: We are authorized to answer one question at a time since you have not mentioned which question you…

Q: ou are an economic analyst for the Parliamentary Budget Officer (PBO) and have been charged with the…

A: A budget is a financial plan that frames an individual's, organization's, or alternately…

Q: Federal Government's Budget Plan for Fiscal Year ($billion)          REVENUES     OUTLAYS   Personal…

A: Budget plan refers to that plan which provides estimates of the future revenues and expenses.

Q: Fill in the blanks to complete the passage about the time lags of fiscal policy. Drag word(s) below…

A: Fiscal Policy refers to the use of government revenue and expenditure to influence the overall…

Q: In the presence of reduced consumer confidence, the government can: (Click to select) decrease…

A: Fiscal policies are the measures used by the government to affect the economy. The major fiscal…

Q: Real-Time Data Analysis Exercise In 2020, government spending in the U.S. was $6.55 trillion, and…

A: The government deficit=(government expenditure) -(tax collection)

Q: The graph shows an economy that is above full employment. To restore full employment, the government…

A: The full employment equilibrium is the long run condition in an economy where aggregate supply…

Q: a. From 2015-2020, in how many years was the CBO too optimistic (underestimating the deficit)? b.…

A: Disclaimer- “Since you have asked multiple question, we will solve the first three question for you…

Q: Suppose the US Federal Government decides to increase its spending without issuing debt by raising…

A: In short run, if taxes are imposed, that will raise the price above initial equilibrium level. If we…

Q: Presidential candidate trump promised in mid 2016 that if he became President, he would never have…

A: A budget deficit occurs when expenses exceed revenue and indicate the financial health of a country.…

Q: Entitlement spending is Group of answer choices is another word for Discretionary Spending required…

A: Entitlement services like medicaid and medicare, as well as necessary interest payments on the…

Q: 18.Graphically illustrate an economy experiencing a recessionary gap in the short-run and discuss…

A: In terms of its ability to alleviate economic downturns through government intervention,…

Q: Using an aggregate supply and demand graph, show what happens when expansionary fiscal policies are…

A: Expansionary fiscal policy refers to the government policy that increases in government expenditure…

Q: Which of the following budget philosophies advocates keeping the budget in balance every year,…

A: Cyclically balanced budget advocates keeping the budget in balance every year, except during…

Q: Assume the following: Aggregate Expenditures (AE) = $2,500 • National Income (Y) = $1,500 •…

A: Aggregate expenditure: AE = C + I + G + X - M => AE = 150 + 0.9(Y-T) + 500 + 800 + 600 -0.10Y…

Q: An economy is operating with output $50,000,000 below the natural rate of output. Fiscal policy…

A: here we calculate the how much government spending affect economy and need of tax by using the…

Q: 15 and G = 17. Consumption, as you would expect, does depend on income via the nsumption function C…

A:

Q: f Congress and the president decide an expansionary fiscal policy is necessary, then they should…

A: Fiscal policy is related to government spending and taxes. Fiscal policy is a policy in which the…

Q: Why does the budget require a forecast of the economy? Under what circumstances would actual…

A: A budget is a financial document or the financial plan of an economy which includes the planned…

Q: 3. Budget balances and the national debt The following table lists federal expenditures, revenues,…

A: Total tax revenue as a percentage of GDP serves as a proxy for the amount of output that is taxed by…

Q: Compare the impact of a recession that reduces consumer income by 10 percent on the  consumption of…

A: A recession means a sustained period of weak growth in real GDP (output) that is accompanied by a…

Q: In the economy of Akron, the tax and savings functions are as follows: T=220+0.2Y S=-140+0.3Y a)…

A: The consumption function is an economic concept that shows the relationship between consumer…

Q: In the presence of reduced consumer confidence, the government can: (Click to select) decrease…

A: Aggregate demand is a sum of consumption spending, investment, government spending and net exports.

Q: Suppose the economy begins at full employment. Label this starting point as point "1." Then,…

A: Aggregate supply: The aggregate supply or AS is a macroeconomic concept. The total amount of…

Q: The president has just signed a new budget that drastically cuts taxes without decreasing government…

A: Fiscal policy refers to the set of policies that the government uses to control the fluctuations in…

Q: Refer to the Figure. If the economy is at point N on the curve, then a decrease in the tax rate will…

A: Laffer curve refers to the curve that depicts the relationship between the tax revenue of the…

Q: Define the tax multiplier and give the algebraic expression.

A: A payment that is compulsory and is levied by the Government to fund the expenditures of the state…