Given the following information: Natural real GDP = 11000 Actual real GDP = 10000 Tax rate (t) = 10% Government Expenditure (G) = 1200 Find: 1. The amount of taxes at natural and actual real GDP. 2. Natural employment deficit (NED). 3. Actual deficit.
Given the following information: Natural real GDP = 11000 Actual real GDP = 10000 Tax rate (t) = 10% Government Expenditure (G) = 1200 Find: 1. The amount of taxes at natural and actual real GDP. 2. Natural employment deficit (NED). 3. Actual deficit.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Given the following information:
Natural real GDP = 11000
Actual real GDP = 10000
Tax rate (t) = 10%
Government Expenditure (G) = 1200
Find:
1. The amount of taxes at natural and actual real GDP.
2. Natural employment deficit (NED).
3. Actual deficit.
4. The cyclical deficit.
5. Suppose that fiscal policy is used to increase actual real GDP to natural real GDP through tax cut from 10% to 8%. Compute the new natural employment deficit (NED).
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