If GDP is $800 and government spending is G1, the size of Motak's budget deficit is $ billion. b. If government spending is decreased by the size of the deficit in part (a), draw the new curve labelled G2 in the graphing area above. c. Suppose the multiplier has a value of 3, the new level of equilibrium GDP is $ billion. d. Motak's deficit at this new level of equilibrium GDP is $ billion.
If GDP is $800 and government spending is G1, the size of Motak's budget deficit is $ billion. b. If government spending is decreased by the size of the deficit in part (a), draw the new curve labelled G2 in the graphing area above. c. Suppose the multiplier has a value of 3, the new level of equilibrium GDP is $ billion. d. Motak's deficit at this new level of equilibrium GDP is $ billion.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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a. If
b. If government spending is decreased by the size of the deficit in part (a), draw the new curve labelled G2 in the graphing area above.
c. Suppose the multiplier has a value of 3, the new level of equilibrium GDP is $ billion.
d. Motak's deficit at this new level of equilibrium GDP is $ billion.

Transcribed Image Text:Answer the questions below for the economy of Motak using the graph below.
Government spending / net taxes
400
350
300
250
200
150
100
50
The Economy of Motak
(600, 375)
200 400 600 800 1000 1200 1400
Real GDP
NTR
G1
Tools
/
G2
@
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