Instructions: Enter your answer as a whole number. If you are entering a negative number include a minus sign a How much does aggregate demand need to change to restore the economy to its long-run equilibrium? 160 billion b. If the MPC is 0.8, how much do taxes need to change to shift aggregate demand by the amount you found in part a? billion Suppose instead that the MPC is 0.75. c. How much does aggregate demand and taxes need to change to restore the economy to its long-run equilibrium? Aggregate demand needs to change by $ 160 billion and taxes need to change by $ billion.

Instructions: Enter your answer as a whole number. If you are entering a negative number include a minus sign a How much does aggregate demand need to change to restore the economy to its long-run equilibrium? 160 billion b. If the MPC is 0.8, how much do taxes need to change to shift aggregate demand by the amount you found in part a? billion Suppose instead that the MPC is 0.75. c. How much does aggregate demand and taxes need to change to restore the economy to its long-run equilibrium? Aggregate demand needs to change by $ 160 billion and taxes need to change by $ billion.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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This question checks whether you understand the procedure for deriving the economy's aggregate demand curve. Think back to how this curve was derived in class. Please identify which of the following steps comes first, second, third, and fourth. First ___________ Second __________ Third ___________ Fourth ___________ Choose : O. See what level of R is implied by the monetary rule. O. Draw the Spending Curve. O. Identify the point of Spending Balance (where Y = C+1+G+ X). O. Pick an inflation rate.
Given that the maginal propensity to consume (MPC) is 0.50, what is the change in equilibrium output (or aggregate demand), if there is a tax is reduced by 50? Hint: Use the tax multiplier formula. -50 -25 50 25
Need help with this. THanks -When Government Spending increases by $10 B Aggregate Demand increases by MORE than $10 B. Which part of Aggregate Demand (C, I, G, or X?) increases so as to make this ripple effect, or multiplied impact, happen?
> A Moving to another question will save this response. 8 > » Question 18 Answer The economy is in a recession. The government enacts a policy to increase the real GDP by $10 billion. The MPS is 0.2. Assuming that the aggregate supply curve is horizontal across the range of GDP being considered, by how much should the government change spending or taxes in order to achieve its objective? Show your calculations., For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). E vE v 面 A v ... BIUS Paragraph Times New R. v 12pt POWERED BY TINY >
supply equation is Y - Ypot + 80 (P-Pe), where Ypot is the potential level of output. In 2016, the population was 400 million, and the structure of the economy was described by the following equations for household consumption behavior and taxes received: C = 100+ 0.8DI, and T = 0. where all monetary values are in billions of dollars. Government spending was fixed at $1700 billion, and firm's investment behavior was fixed at $800 billion. Trading is allowed in this economy and in 2016, trading occurred such that the trade account was balanced. That is, net exports (X-IM) was equal to zero. (Question 15 of 20) Now consider that in in the following year (2017), the government decided to implement a policy aimed at moving the economy to full employment. In its decision to move the economy to full employment, they used government spending as the policy tool. The structure and fixed spending behaviors remain the same as they were in 2016, except for government spending. In addition, changes…
Explain why aggregate demand curve is downward sloping? b. What is the difference between monetary and fiscal policy?
When Government Spending increases by $10 Billion Aggregate Demand increases by MORE than $10 Billion. Which part of Aggregate Demand increases so as to make this ripple effect, or multiplied impact, happen?
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Which fiscal policy will increase aggregate supply? increasing tax rates on businesses O increasing tax rates on consumers instituting more regulations on businesses allocating more money for federal student loans
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TRUE/FALSE According to our discussion of supply side economics, there are positive aggregate demand side effects and positive supply side effects, similar to what happened during the new economy.