Keynesian 1) Draw the total expenditure and total production model. 2) Draw the total expenditure and total production model in a recessionary gap. 3) Draw the total expenditure and total production model in an inflationary gap. 4) The following data applies to the economy: Personal Income Consumption $10000 $7000 $12000 $8000 $14000 $9000 The tax rate is 25%. What is the marginal propensity to consume?. What is marginal propensity to save? What is the multiplier for the economy? 5) The marginal propensity to consume is 60%. Government spending increases by $500,000. What is the numeric change in real GDP? What type of spending is this called? 6) The marginal propensity to consume is 75%. Disposable income increases by $500,000. What is the numeric change in real GDP? What type of spending is this called? What is the difference from 5)? 7) The economy is in an inflationary gap of $1,500. What is one fiscal policy the government can undertake to bring the economy to back to the natural unemployment rate? Graph using the total expenditures and total production model and explain how the policy would work. Be numerically precise, using the information in 4). 8) The economy is in a recessionary gap of $1,200. What is the other fiscal policy the government can undertake to bring the economy to back to the natural unemployment rate? Graph using the TE/TP model and explain how the policy would work. Be numerically precise, using the information in 4
Keynesian 1) Draw the total expenditure and total production model. 2) Draw the total expenditure and total production model in a recessionary gap. 3) Draw the total expenditure and total production model in an inflationary gap. 4) The following data applies to the economy: Personal Income Consumption $10000 $7000 $12000 $8000 $14000 $9000 The tax rate is 25%. What is the marginal propensity to consume?. What is marginal propensity to save? What is the multiplier for the economy? 5) The marginal propensity to consume is 60%. Government spending increases by $500,000. What is the numeric change in real GDP? What type of spending is this called? 6) The marginal propensity to consume is 75%. Disposable income increases by $500,000. What is the numeric change in real GDP? What type of spending is this called? What is the difference from 5)? 7) The economy is in an inflationary gap of $1,500. What is one fiscal policy the government can undertake to bring the economy to back to the natural unemployment rate? Graph using the total expenditures and total production model and explain how the policy would work. Be numerically precise, using the information in 4). 8) The economy is in a recessionary gap of $1,200. What is the other fiscal policy the government can undertake to bring the economy to back to the natural unemployment rate? Graph using the TE/TP model and explain how the policy would work. Be numerically precise, using the information in 4
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Keynesian
1) Draw the total expenditure and total production model.
2) Draw the total expenditure and total production model in a recessionary gap.
3) Draw the total expenditure and total production model in an inflationary gap.
4) The following data applies to the economy:
Personal Income Consumption
$10000 $7000
$12000 $8000
$14000 $9000
The tax rate is 25%. What is the marginal propensity to consume?. What is
marginal propensity to save? What is the multiplier for the economy?
5) The marginal propensity to consume is 60%. Government spending increases by
$500,000. What is the numeric change in real GDP? What type of spending is this
called?
6) The marginal propensity to consume is 75%. Disposable income increases by
$500,000. What is the numeric change in real GDP? What type of spending is this
called? What is the difference from 5)?
7) The economy is in an inflationary gap of $1,500. What is one fiscal policy the
government can undertake to bring the economy to back to the natural
and explain how the policy would work. Be numerically precise, using the
information in 4).
8) The economy is in a recessionary gap of $1,200. What is the other fiscal policy the
government can undertake to bring the economy to back to the natural
unemployment rate? Graph using the TE/TP model and explain how the policy
would work. Be numerically precise, using the information in 4
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