Need help what formulas are used to answer questions please show step by step Assume the MPC is 0.75 and policy makers have targeted real GDP to decrease by $300 billion. By how much must taxes be increased to achieve this goal? Assume the MPC is 0.70 and the government increases spending on public school programs by $20 billion. What is the value of the initial impact on real GDP? What is the value of the total impact on real GDP?

Q: When the MPC increases: a. the government spending multiplier stays the same b. the government…

A: The marginal propensity to consume refers to that portion of the increased income that was spent by…

Q: Consider a hypothetical economy. Households spend $0.90 of each additional dollar they earn and save…

A: Aggregate expenditure: aggregate expenditure is the sum of consumption expenditure, investment…

Q: Why is income increased after "fiscal policy"? Why does our demand for income increase too?

A: Fiscal policy refers to the government's use of taxation and spending to influence the overall state…

Q: Suppose the government increased spending 25,000,000, that there is no crowding out, and that…

A: Gross Domestic Product, or GDP, is a metric used to assess a nation's economic performance. It is…

Q: What is the primary component(s) of GDP that Fiscal Policy is trying to effect?

A: Fiscal Policy refers to the change in government spending or taxes in order to promote economic…

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: The hypothetical information in the following table shows what the situation will be in 2016 if the…

A: A contractionary fiscal policy refers to a policy that is aimed at reducing economic activity in an…

Q: MPC is 0.60. To increase GDP by $360, how much should we decrease taxes?

A: MPC is 0.60. To increase GDP by $360, how much should we decrease taxes?

Q: The government spends an additional $926 billion and the marginal propensity to consume is 66%. How…

A: According to the question, it is given that : The government spends an additional $926 billion The…

Q: Consumer saves 15% of additional income, spends 65% of income on goods and services and spends 20%…

A: The tax multiplier can be calculated by using the following formula.

Q: partial data in the table below are for the economy of Arinaka. Planned investment, government…

A: MPC  is marginal propensity to consume,which tells how much of additional income is used on…

Q: Calculate the government spending multiplier and the tax multiplier if the MPC is 0.6. Show your…

A: The government spending multiplier is calculated as follows.

Q: GDP, Billions Consumption, Billions $100 $120 200 200 300 280 400 360 500 440 600 520 700 600 c. Now…

A: Given the proportional tax = 10% We are required to find the new consumption schedule, MPC, and…

Q: Please answer the question below: If the current real GDP is P700 billion, which of the following…

A: MPC = 0.8 Potential output = P800 billion Real GDP = P700 billion

Q: Which of the following is not a valid point in debating the merits of increasing government…

A: In the debate about the merits of increasing government expenditures or cutting taxes during a…

Q: f the MPC IS 0.9 What should the government do to increase GDP by $4500?

A: The multiplier effect occurs due to an injection in the circular flow of income that increases…

Q: The government spends an additional $668 billion and the marginal propensity to consume is 79%. How…

A: Government spending multiplier: - it is a fraction that shows the magnitude of the change in…