Other things remain unchanged, a country's Aggregate Demand is made up of $100 billion of consumption, $40 billion of investment, $10 billion of net exports, and $20 billion of government purchases. Full-employment GDP is $200 billion. To obtain full employment under these conditions, the government should: Select one: a.increasing corporate income taxes to discourage private domestic investment. b.reduce tax rates and/or increase government spending. c.increasing interest rate on government bonds to encourage personal saving.

Other things remain unchanged, a country's Aggregate Demand is made up of $100 billion of consumption, $40 billion of investment, $10 billion of net exports, and $20 billion of government purchases. Full-employment GDP is $200 billion. To obtain full employment under these conditions, the government should: Select one: a.increasing corporate income taxes to discourage private domestic investment. b.reduce tax rates and/or increase government spending. c.increasing interest rate on government bonds to encourage personal saving.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Consider an economy in which the only taxes collected by the government are lump-sum (the tax bills of individuals are independent of their actions). If the government increases its tax revenue, then, given GDP remains unchanged, the disposable incomes of households will: Decrease. Increase. Remain unchanged. None of the above.
None
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Table 11-6 Government Real GDP Consumption Investment Purchases 1 Net Exports $1,000 $1,000 $100 $150 -$50 2 3 2,000 1,900 100 150 -50 3,000 2,800 100 150 -50 4 4,000 3,700 100 150 -50 Using the table above, answer the following question. The numbers in the table are in billions of dollars. 13) Refer to Table 11-6. What is the value of MPC? A) 0.2 B) 0.5 C) 0.75 D0.9 E) None of the above
Now consider an economy in which the government lowers its spending. In the long run, the result would be _____________ in the price level and _____________ in real output. an increase; an increase a decrease; no change a decrease; a decrease None of the listed options is correct. no change; a decrease