If the MPC in an economy is 0.80, government could close a recessionary expenditure gap of $160 billion by cutting taxes by Multiple Choice $200 billion. $160 billion. $80 billion. $128 billion,

Q: suppose the government wishes to illuminate recessionary of a gdp of 100 billion in the MPC is .075.…

A: To calculate increase in government spending we have to first calculate the spending multiplier.

Q: If the MPC in an economy is .8, government could close a recessionary expenditure gap of $200…

A: Answer: Given, MPC (Marginal Propensity to consume) = 0.8 Recessionary Expenditure Gap= $200 To find…

Q: If the MPC in an economy is 0.80, government could close a recessionary expenditure gap of $80…

A: A negative output gap also known as recessionary output gap is when the long run output exceeds the…

Q: Suppose the government wishes to eliminate an inflationary gap of $100 billion and the MPC is 0.50.…

A: MPC is the marginal propensity to consume.  Spending multiplier is given by the following formula :-…

Q: suppose the government wishes to illuminate recessionary GAP of 100 billion and the  MPC is .75. How…

A: The multiplier shows the change in real GDP as a result of a change in the autonomous expenditure.…

Q: If MPC = .5, a simultaneous increase in both taxes and worthless government spending of $20 will:…

A: The balanced-budget multiplier is equal to 1 in this case . When the government increases spending…

Q: Suppose the government seeks to achieve a balanced budget by levying taxes of $50 billion and making…

A: If MPC=0.8 then  MPS=1-MPC MPS=1-0.8 MPS=0.2

Q: Assume that initial GDP is $1,000 and we want to expand it to $1,600. Average MPC for the country is…

A: Economists use the marginal propensity to save (MPS) to measure the link between income and savings.…

Q: If the MPC in an economy is 0.80, government could close a recessionary expenditure gap of S80…

A: The marginal propensity to consumer (MPC) refers to the change in the change in the consumption…

Q: If the MPC is​ .75, the government spending multiplier is

A: The government spending multiplier is the amount by which a change in government spending affects…

Q: suppose the government wishes to eliminate a recessionary GAP of 100 billion and the  MPC is .75.…

A: Recessionary gap is when the country's GDP is lower than its GDP at full employment level.…

Q: In a private closed economy where MPC= 0.8, if consumers reduce their spending by $20 billion and…

A: The macroeconomic equilibrium in an economy is determined by the aggregate demand and aggregate…

Q: If the MPC is 0.8 and government spending decreases by $50 million, then equilibrium GDP will…

A: The equilibrium GDP:The equilibrium GDP can be calculated as follows:

Q: In a depressed economy with an MPC of 0.20, what effect will a $200 increase in government spending…

A: Consumption is the sum of autonomous consumption and consumption dependent on income. Disposable…

Q: If MPC is = 0.6 and government spending decreases by dollar 100 billion, what happens to equilibrium…

A: Marginal proepensity to consume = 0.6 Decrease in spending = $100 billion

Q: Suppose the government wishes to eliminate  an inflationary gap  of $100 billion and the MPC is 0.5.…

A: Answer a) Spending multiplier = 1(1-MPC)                                 =11-0.5=2

Q: If the MPC in an economy is 0.80, government could close a recessionary expenditure gap of $100…

A: ANSWER     The marginal propensity to consumer (MPC) refers to the change in the change in the…

Q: If the MPC in an economy is 0.80, government could close a recessionary expenditure gap of S80…

A: Given data: MPC is 0.80 Expenditure gap is $80 billion

Q: The marginal propensity to consume out of permanent income equals 0.9 and the marginal propensity to…

A: Economic analysis is the process of evaluating data and patterns to better understand economic…

Q: If a rise in government expenditure of $2 million led to a rise in GDP of $10million, calculate the…

A: In economics, a multiplier is a broad term that refers to an economic aspect that, when increased or…

Q: Determine the net impact upon the nation's economy that results from equal increases in government…

A: Change in Y = [{1/ (1-MPC)}* change in G] – [{MPC/ (1-MPC)}]* change in T                      =…

Q: The marginal propensity to save is 0.2. Equilibrium GDP will decrease by $50 billion if the…

A: The Keynesian model would result in the determination of the price level and the real GDP. The…

Q: in another economy, the MPC = 4/5, government needs to increase expenditures $20 to complete a…

A: In this scenario, the marginal propensity to consume (MPC) is 4/5, meaning that for every additional…

Q: he multiplier is and the change in eal GDP from the increase in government xpenditures is billion

A: Gross domestic product is a monetary measure of the market value of all the final goods and services…

Q: The MPC is 0.5. what happens to the real GDP if the government increases spending by $10 million?

A: Given MPC = 0.5 Increase in government spending = $10

Q: If the MPS were equal to 0.75, the expenditure multiplier would be * a. Less than zero b. zero c.…

A: Given: MPS=0.75 To find: Expenditure multiplier

Q: Suppose that autonomous consumption is 1,500, government purchases are 500, planned investment…

A: We can find the equilibrium GDP by the following formula: Y = C + I + G + NX where,  Y is…

Q: If the MPC is 0.8 and investment increases by $3 billion, the equilibrium GDP will increase by $15…

A: A fiscal multiplier provides the number by which iteration occurs in the expansion or contraction of…

Q: Suppose the MPC = 0.8 and the government increases spending by P100 billion, financing this spending…

A: MPC = 0.8 -------- Government spending multiplier = 1 / (1 -MPC) => Government spending…

Q: If MPC = 0.5, a simultaneous increase in both taxes and government spending of $20 will a. decrease…

A: The pending multiplier denotes the ratio of change in the real GDP to the change in the initial…

Q: In a private closed economy where MPC = 0.90, if consumers reduce their spending by $5 billion and…

A: Given the MPC = 0.90 Reduction in consumption = $5 billion Decrease in investment  = $4 billion

Q: f the MPC in an economy is 0.75, government could close a recessionary expenditure gap of $300…

A: The MPC in an economy is 0.75There is a recessionary expenditure gap of $300 billion in the economy.…

Q: Given a MPC of 0.75, if consumer spending decreases by $300 billion, we would expect RGDP to…

A: In Keynesian economics, the change in aggregate demand is able to affect the real GDP level and…

Q: If the MPC in an economy is .8, the increase in real GDP can occur (aggregate demand curve can shift…

A: Multiplier = 1/ [1 - MPC] The required increase in government spending = Total increase in aggregate…