Question 37 Suppose in the economy of Richlandia the GDP in 2021 was $ 150 billion. Also, assume that gross investments was $40 billion, personal consumption expenditure was $ 80 billion and net exports was -20 billion. What was the value of government spending in Richlandia in 2021? 0 $0 O $ 10 billion O $50 billion O $30 billion
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- Gross Real GDP (after taxes) Investment $10 10 ITTIT 20 10 10 10 10 10 10 40 70 100 130 160 Consumption $-20 100 K Net exports +5 45 Government purchaies $15 7. Refer to the above table. If the full-employment real GDP is $70 the 15 15 15 15 15 15 OA) A. inflationary expenditure gap is $30. OB) B. recessionary and inflationary expenditure gaps are both $0. OC) C. inflationary expenditure gap is $10. OD) D. recessionary expenditure gap is $10.One day, Barry the Barber, Inc., collects $400 forhaircuts. Over this day, his equipment depreciates invalue by $50. Of the remaining $350, Barry sends $30to the government in sales taxes, takes home $220 inwages, and retains $100 in his business to add newequipment in the future. From the $220 that Barrytakes home, he pays $70 in income taxes. Based onthis information, compute Barry’s contribution to thefollowing measures of income.a. gross domestic productb. net national productc. national incomed. personal incomee. disposable personal incomeFigure 4 Expenditures 9000 6000 3000 3000 6000 Disposible Income 1. In Figure 4, how much is government spending when disposable income is 3000? CH-G 9000 2. In Figure 4, how much is government spending when disposable income is 9000?
- 6. Over time, increases in Potential GDP are the result of O A. inflation O B. increased government spending O C. lower taxes O D. increases in technologyProblem 1 Given the following data for a closed economy I= 3400 Planned Investment G=4000 Government Spending C= 3,800 + 0.8 Yd Consumption function T= 1000 TaxesQuestion 7 Which of the following would be counted in this year's GDP? O a O b O C Od Question & What is the difference between real GDP and nominal GDP? O a O b Column A 1. 2. C d Question 9 Match each phase of the business cycle to its correct definition. 3. The bonus check a worker receives this year the value of a loan taken out this year The value of a savings bond sold by the federal government to investors this year The value of a television produced last year but sold this year 4 Real GDP allows for depreciation; nominal GDP allows for no depreciation. Real GDP includes nonmarket activities; nominal GDP has no nonmarket activities. Real GDP is based on constant prices; nominal GDP is based on the current year's prices. Real GDP is accurate to hundreds of dollars; nominal GDP is accurate to thousands of dollars. period of economic decline marked by falling real GDP a period of economic growth as measured by a rise in real GDP the height of an economic expansion, when real GDP…
- (a) What is the current equilibrium level of national income? = (b) What is the level of injections 5+ 8 + 7= 206 (c) What is the level of withdrawals o 60+5+8+710-70 yoour TR:7bS-? (d) Assuming that tax revenues are 7 billion, how much is the level of savings? 13-50 040 (e) If national income now rises to 80 billion, and as a result, the consumption of domestically produced goods rises to 58 billion, what is the mpca (f) What is the value of multiplier? (g) Given the initial level of national income of 80 billion, now assume that spending on exports rises by 4 billion, spending on investment rises by 1 billion, and government expenditure falls by 2 billion. By how much the national income will change? 83 Q2, You find the following economic data for a closed economy Utopia: Marginal propensity to consume = 0.6, Investment = 30, Governement spending = 20 Government revenues =20 (Tax collection) People will consume a minimum of 10, no matter what their income is. 4=80 2. I=6 1. What is…Problem 1 The various expenditure categories within the economy are: C = 600+ 0.8Yd | = 800 G = 600 NX = 0 T= 700 Refer to problem 1. Equilibrium Real GDP is O 7200 O 4200 O 1800 O 5500To determineThe government expenditure required to retain the full employment level in the economy
- 2. Calculating the debt to GDP ratio Suppose the following statistics characterize the financial health of the hypothetical economy Spendia at the end of 2017: • Gross domestic product (GDP) is equal to $100 billion. • The national debt is equal to $130 billion. • The government has a budget deficit of $7 billion. • The debt ceiling in Spendia is set at $148 billion. The following calculations help you see how the ratio of debt to GDP changes from one year to the next. Complete the first row of the following table by computing the ratio of national debt to GDP. Suppose that nominal GDP remains at $100 billion in 2018, and again the government runs a budget deficit of $7 billion. For simplicity, assume the interest rate on the national debt is 0%, and no payments are being made to reduce the debt. Calculate national debt and the debt-to-GDP ratio in 2018. Enter these values in the second row of the following table. Year 2017 2018 GDP National Debt (Billions of dollars) (Billions of…Goverment spending Social Security contributions Corporate taxes Personal income taxes Rent Wages 231 Consumption expenditures 250 Gross Private Domestic Investment 40 Select one: 50 20 5 8 54 OA. 228. B. 155. 301. 84. Using the above table, the Personal Income (Pl) for the country is O C. D. Profit Indirect business taxes Imports Exports Interest Depreciation Gove mment transfer payments 8953565 28 10 10QUESTION 4 If income tax rates are based on nominal income, as inflation increases, taxpayers will see A. their taxes fall as their income falls. OB. an increase in the nominal income. OC. their taxes rise even though their real income is falling. O D.their taxes fall even though their real income is rising. O E. an increase in their real incomes G. H. B Alt Control