Q4.Hi can you please help me awnser the attached question? 4.What is the 'Keynesian Fiscal Multiplier' andwhat things might decrease its magnitude?Hints: Give both the definition of and formula for theMultiplier. Give an intuitive explanation of why there is amultiplier. Go though the elements of the Marginalpropensity to withdraw. Explain when MPC might be lowbecause of expectations.

The initial rise in expenditure leads to multiple rise in the income level, such phenomenon is known…

hat is the 'Keynesian Fiscal Multiplier’ and things might decrease its magnitude? ve both the definition of and formula for the : Give an intuitive explanation of why there is a Go though the elements of the Marginal

hat is the 'Keynesian Fiscal Multiplier’ and things might decrease its magnitude? ve both the definition of and formula for the : Give an intuitive explanation of why there is a Go though the elements of the Marginal

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter18: Six Debates Over Macroeconomic Policy

Section: Chapter Questions

Problem 2CQQ

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Suppose that due ot a fiscal stimulus, there is an increase in disposable incomes of $100 billion in the first round. Then, $33 billion was spent in consumption from this initial change of the disposable incomes. Following the same marginal propensity to consume, how much is the change in consumption spending in the next round from the $33 billion?
QUESTION 20 Consider an economy that is producing an aggregate output of Y2 shown in the figure below. The economy fäces can be closed by Aggregate price level which fiscal policy. LRAS SRAS AD2 AD1 AD Y2 Yp Y1 Real GDP Oa. an inflationary gap; expansionary O b-a recessionary gap; expansionary Oc a recessionary gap; contractionary O d an inflationary gap; contractionary
The Life-Cycle/Permanent Income Model of Consumption makes a different prediction from the Keynesian Model, about how Consumption reacts to an increase in current income. Which of the following is the best description of the difference? O In the Keynesian Model, consumers will increasktheir spending by the mpc times the increase in income. In the Life-Cycle/Permanent Income Model, consumers will not increase their spending by much unless they believe that the increase in their income is permanent. O In the Life-Cycle/Permanent Income Model, consumers will increase their spending by the mpc times the increase in income. In the Keynesian Model, consumers will only increase their spending if they believe that the increase in their income is temporary. O In the Keynesian Model, consumers will increase their spending by the mpc times the increase in income. In the Life-Cycle/Permanent Income Model, consumers will only increase their spending if they believe that the increase in their income…
uestion 28 ot yet swered arked out of 0 Flag estion In the Keynesian AE model, if the autonomous components of consumption, investment, government spending, and net export spending total $200 billion and the marginal propensity to spend is 0.8, under what circumstances will unplanned changes in inventory be zero? a. when output is $160 billion b. when output is $250 billion C. when output is $1000 billion d. when output is $1600 billion cross out cross out cross out cross out
Suppose MPC equals 0.9, government taxes 30% of all incomes, and the marginal propensity to import equals 0.07. The economy's real GDP is currently $5,454 billion while its potential real GDP is $6,000 billion. Glven a horizontal SRAS curve, what change in government spending on goods and services would bring the economy to full employment real GDP? When doing the calculations, round the value for the multiplier to 2 decimal places, and round your final value for the change in G to the nearest billion.
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pls answer urgent all question Q1,a,b,c . Q1-Suppose the government reduces taxes by $20 billion, that there is no crowding out, and that the marginal propensity to consume is ¾. a. What is the initial effect of the tax reduction on aggregate demand? b. What additional effects follow this initial effect? What is the total effect of the tax cut on aggregate demand? c.How does the total effect of this $40billion tax cut compare to the total effect of a $40 billion in governmentpurchases? Why?
Consider a keynesian macromodel Y=(C0+G+I) / (1-c) where C0 is autonomus consumption, G is government consumption expenditure, I is investment expenditure, c is the marginal propensity to consume. In this model, if lthere is an increse in both labor productivity and the marginal propensity to consume while autonomus expenditures remain unchanged, what will happen to the level of employment? a. can't say for sure b. decreses c. stays the same d. increases
Help The aggregate demand curve can be derived from the aggregate expenditures model as indicated by the fact that Multiple Choice an increase in the price level shifts the aggregate expenditures schedule upward and increases real GDP a decrease in the price level shifts the aggregote expenditures schedule downward and decreases real GDP a decreose in the price level shifts the aggregate expenditures scheduie upiward and decreases real GDP an increase in the price level shifts the eggregate expenditures schedule downverd and decreases real GDP
Suppose the multiplier has a value that exceeds 1, and there are no crowding out or investment accelerator effects. Which of the following would shift aggregate demand to the left by more than the increase in expenditures? A. an decrease in government expenditures B. an decrease in net exports O O C. an decrease in investment spending D. All of the above are correct.
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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