Consider the following economy with: Y = 220 N-2N^2, MPN = 220-4N, NS = 8.75 w+0.2T, where T-50 is lump-sum tax. The government maintains a balanced budget such that T-G for all economies. C^d = 0.4 Y- 1000r-0.4 T, I^d=3613.125-500r, M^d=P*(0.4 Y-2000 i), M=9275, expected inflation rate=0.04. What is the full-employment level of output? O less than or equal to 6000 O greater than 6000 and less than or equal to 6100 O greater than 6100 and less than or equal to 6200 O greater than 6200 and less than or equal to 6300 Ogreater than 6300 QUESTION 22 Consider the following economy with: Y = 220 N-2N^2, MPN = 220-4N, NS 8.75 w+0.2T, where T =50 is lump-sum tax. The government maintains a balanced budget such that T-G for all economies. C^d = 0.4 Y- 1000r-0.4 T, I^d=3613.125-500r, M^d-P^(0.4 Y- 2000 i), M=9275, expected inflation rate=0.04. What is the real interest rate that clears the goods market? O less than or equal to 0.01 O greater than 0.01 and less than or equal to 0.02 O greater than 0.02 and less than or equal to 0.03 O greater than 0.03 and less than or equal to 0.04 O greater than 0.04

Consider the following economy with: Y = 220 N-2N^2, MPN = 220-4N, NS = 8.75 w+0.2T, where T-50 is lump-sum tax. The government maintains a balanced budget such that T-G for all economies. C^d = 0.4 Y- 1000r-0.4 T, I^d=3613.125-500r, M^d=P*(0.4 Y-2000 i), M=9275, expected inflation rate=0.04. What is the full-employment level of output? O less than or equal to 6000 O greater than 6000 and less than or equal to 6100 O greater than 6100 and less than or equal to 6200 O greater than 6200 and less than or equal to 6300 Ogreater than 6300 QUESTION 22 Consider the following economy with: Y = 220 N-2N^2, MPN = 220-4N, NS 8.75 w+0.2T, where T =50 is lump-sum tax. The government maintains a balanced budget such that T-G for all economies. C^d = 0.4 Y- 1000r-0.4 T, I^d=3613.125-500r, M^d-P^(0.4 Y- 2000 i), M=9275, expected inflation rate=0.04. What is the real interest rate that clears the goods market? O less than or equal to 0.01 O greater than 0.01 and less than or equal to 0.02 O greater than 0.02 and less than or equal to 0.03 O greater than 0.03 and less than or equal to 0.04 O greater than 0.04

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

Scenario You are a member of the president's Council of Economic Advisers for the country of Manulo. Currently the economy of Manulo is feeling the impacts of the crisis in the nation of Zedland, a major trade partner. Manulo's GDP is currently at $300b and is estimates show that Manulo's economy has the capacity to produce $360b. As a nation Manulo has a Marginal Propensity to Save of 10%, has zero national debt, and its most recent government budget was balanced. Prepare a brief report that answers the following questions: 1. Based on what you explained previously (scenario 4) about short run vs long equilibrium, the president favors immediate action, and wants you put together a fiscal policy response. Which fiscal policy action would you recommend (expansionary or contractionary)? Explain your rationale with words. 2. The president wants to use government spending, rather than taxes, to close the output gap in the economy. The output gap refers to the difference between the…
Suppose that the economy is experiencing a recession with an estimated recessionary gap of $15 billion. Congress is considering the use of fiscal policy to ease the recession, but due to current political sentiments, it has determined that the maximum spending increase the government is willing to support is $2 billion. It wants to make up the remainder of the recessionary gap using tax cuts. If a spending increase of $2 billion is approved and the MPC is 0.8, by how much will taxes need to be reduced to close the remainder of the recessionary gap? Instructions: Round your answer to 2 decimal places. 5 billion
5
Determine the adverse macroeconomic consequences that a government faces when it maintains a long-term pattern of substantial budget deficits.
given that, consumption is C=100+0.75Yd Taxes is T=50+0.5Y Export is X=200 Import is M=50+0.25Y Government spending is G=150 Investment is I=200. Y is domestic income and Y is private disposable income. Determine the surplus or deficit in the government budget at equilibrium
T = 120 + 0.25Y G = 640 IM = 100 + 0.1Y X = 540 a. The trade balance (X – IM) when the government’s budget is balanced is $ b. The government’s budget balance (T – G) when the trade balance is zero is $
A government fınances all of its debt through 1-year treasury bonds. This government is able to collect $175 million in tax revenue and the country has a GDP of $765 million. If this government is able to consistently sell treasury bonds which yield 3.29% interest, what is the maximum debt-to- GDP ratio this country could maintain and still make all interest payments? Put your answer in percentage form (e.g. 30.57 not 0.3057) and then round to two decimal places.
Based on our understanding of the model presented in Ch3, a 5% tax cut in a country with balanced budget will cause an increase in equilibrium output? TRUE OR FALSE
Determine the state of the budget (in deficit, in balance, in surplus), if: Government spending on the economy is 5000 monetary units, while rate of taxes incomes is 7000 monetary units. Public transfers are purchased in the amount of 1100 monetary units. The national debt is 9000 monetary units, so the State spends 10% per annum to pay this loan off.
If raising taxes or borrowing are your only two choices of financing current expenditures, which one would you choose. Explain your answer based on TWO (2) approaches?
Because of the timing problems of discretionary fiscal Keynesian policy economists favor instituting automatic stabilizers which once established effect the economy without additional government action, producing a government deficit automatically in a recession and generate budget surpluses in expansions. Which of the following would act as automatic stabilizers? a) Progressive income tax b) Infrastructure investment c)The minimum wage d)Negative income tax (e) (a) and (d) only
If the MPC equals 0.5, and real GDP is $14 trillion with potential real GDP $14.5 trillion, how much would governmentpurchases would need to increase by to restore the economy to potential real GDP?