I. Taiwan has an income tax rate, t1, of 28% and a Marginal Propensity to Save (MPS) of 0.4. It is in Eqm but is currentlysuffering from an "inflationary gap" of $350 m. (that is, Eqm Y>Y full employment, FE, aka Yn). Make the necessarycalculations for the to policy that should be instituted. Provide the full name of this policy.II. Most economists believe that tariffs are not the best way to reduce the US trade-balance deficit -- the fact that USIM>US X. (Macro problems should be fixed with macro tools and tariffs are a micro tool.) Derive the identity for Yfrom the expenditure approach for an open economy to discuss what it means when a country is running a trade-balancedeficit and whether it is an economic "good" or "bad." Then derive the twin-deficit identity and use it to explain why theUS runs trade-balance deficits and what can be done, if anything, to reduce them. Make all your assumptions clear.

Since you have asked multiple questions, we will solve the first question for you. If you want any…

Answered: I. Taiwan has an income tax rate, t,,…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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State whether the following statement is true or false, and explain why. If the statement is false, state the true change. If the national economy shrank at an annual rate of 4% per year for four consecutive years, then the economy shrank by 16% over the four-year period.
In the 1960s the U.S entered the Vietnam War, and military expenditures (part of government expenditures) grew from an annual rate of $113 billion to 138 billion. The economy was near full-employment and, therefore, given there was no offsetting tax increase, inflation pressures emerged. Assume the MPC is .75 C) With the AD Excess at $150 billion in 1968, what change in taxes would you have recommended? D) How would an increase in income/transfer payments of $150 billion have affected AD ? Have
Question 15 If the GDP is at 7.1% growth and the RGDP is at 2.2% growth, then the inflation rate is,
What are the expected effects of austerity measures over the longer run
"The oil price run - up of 2007 - 08 was caused by strong demand confronting stagnating world production. Although the causes were different, the consequences for the economy appear to have been very similar to those observed in earlier episodes, with significant effects om overall consumption spending and purchases of domestic automobiles in particular. The experience of 2007 - 08 should thus be added to this list of recessions to which oil prices appear to have made a material contribution". Oil price shocks have an evident impact on the short run aggregate supply curve. With the help of a graph demonstrate how rising oil prices affect the SRAS and explain what other factors can cause this shift.
Which statement is CORRECT? Question 3 options: By keeping actual output approximately equal to potential output, a nation's macro-policy makers may risk producing inflation problems. By keeping actual output above potential output, a nation's macro-policy makers can achieve the goal of high output. By keeping actual output approximately equal to potential output, a nation's macro-policy makers may risk producing employment problems. By keeping actual growth rate of output at its maximum pace, a nation's macro-policy makers can achieve the goal of high output. By keeping actual output approximately equal to potential output, a nation's macro-policy makers can achieve the goal of high output.
Saudi Arabia is an oil exporting country. AD : Y = 710 − 30P + 5G+3Poil， AS : Y = 10 + 5P − 2Poil Y is real GDP, P is the price level, G is the government purchases, and Poil is the world price of oil. (a)Firstly, Write down the equilibrium condition. Then, what is the equilibrium value of real GDP and the price level(assume G and Poil as known variables) (b)Draw the AD/AS graph to show when Poil rises in the world market, what will happen the AD and SAS curves. (c)Explain the price level effect and the output effect due to the change of the oil price.
The growth rate of nominal GDP was 9.4%, and the growth rate of real GDP was 7.4% for Iceland in 2016. Approximately what was the percentage change in prices? %Δprices≈
1
Consider the basic Macroeconomic model involving: Private sector consumption: C = co+c1(Y-T); Y = GDP, T = Taxes Tax function: T = to+t1Y Business sector investment: I = io+i2r, r=interest rate Government spending: G = Go Exports: X = xo+x1x; x = Exchange rate of the dollar Imports: M = mo+m1Y+m2x; x = Exchange rate (a) Identify and explain the parameters: co, t1, i2, and m2. (b) Solve this model for the equilibrium GDP (Y*).
The term potential output refers to: a)The maximum possible output for an economy b)The quantity of output that would be produced if every member of the labor force worked 40 hours per week c)The quantity of output produced when the price level is the same as firms and workers expected when they agreed on input prices and wages d)The quantity of output produced at the intersection of the AD and AS curves
QUESTION 29 The DoDo Bird Co., a U.S.-based MNC has applied the following regression model to estimate the sensitivity of its cash flows to exchange rate movements PCF; = ao + bęet + Ut Where the term on the left hand-side is the percentage change in the inflation adjusted cash flows measured in U.S. dollars over period t and eț is the percentage change in the exchange rate of the euro (versus the dollar; number of dollars required to buy one euro) over period t. The regression model estimates a coefficient of bt equal to 0.5. This indicates that: O a. If the euro appreciates by 1%, DoDo Bird's dollar cash flows will decline by .5%. O b. If the euro depreciates by 1%, DoDo Bird's dollar cash flows will increase by 2%. O c. If the euro depreciates by 1%, DoDo Bird's dollar cash flows will decrease by 2%. Od.If the euro depreciates by 1%, DoDo Bird's dollar cash flows will decline by .5%. O e. None of the above QUESTION 30 The 2017 Tax Cuts and Jobs Act: O a. Lowered corporate tax rate…

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