Suppose the government enacts a stimulus program composed of $500 billion of new government spending and $100 billion of tax cuts for an economy currently producing a GDP of $12,000 billion. If all of the new spending occurs in the current year and the government expenditure multiplier is 1.6, the expenditure portion of the stimulus package will add the economy. (Round your response to two decimal places.) percentage points of extra growth to percentage points of extra growth to the economy. (Round your response to two decimal places.) If the government taxation multiplier is 1.2, the tax cut portion of the stimulus package will add As a result of the stimulus program, the economy's GDP was increased by ☐ percentage points over its value without the program. (Round your response to two decimal places.) If the economy's actual growth was 5 percent, then without the stimulus package, growth would have been ☐ percentage points. (Round your response to two decimal places and use a minus sign if necessary.)
Suppose the government enacts a stimulus program composed of $500 billion of new government spending and $100 billion of tax cuts for an economy currently producing a GDP of $12,000 billion. If all of the new spending occurs in the current year and the government expenditure multiplier is 1.6, the expenditure portion of the stimulus package will add the economy. (Round your response to two decimal places.) percentage points of extra growth to percentage points of extra growth to the economy. (Round your response to two decimal places.) If the government taxation multiplier is 1.2, the tax cut portion of the stimulus package will add As a result of the stimulus program, the economy's GDP was increased by ☐ percentage points over its value without the program. (Round your response to two decimal places.) If the economy's actual growth was 5 percent, then without the stimulus package, growth would have been ☐ percentage points. (Round your response to two decimal places and use a minus sign if necessary.)
Chapter15: Fiscal Policy
Section: Chapter Questions
Problem 7SQP
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Transcribed Image Text:Suppose the government enacts a stimulus program composed of $500 billion of new government spending and $100 billion of tax cuts for an economy currently producing a GDP of $12,000 billion.
If all of the new spending occurs in the current year and the government expenditure multiplier is 1.6, the expenditure portion of the stimulus package will add
the economy. (Round your response to two decimal places.)
percentage points of extra growth to
percentage points of extra growth to the economy. (Round your response to two decimal places.)
If the government taxation multiplier is 1.2, the tax cut portion of the stimulus package will add
As a result of the stimulus program, the economy's GDP was increased by ☐ percentage points over its value without the program. (Round your response to two decimal places.)
If the economy's actual growth was 5 percent, then without the stimulus package, growth would have been ☐ percentage points. (Round your response to two decimal places and use a minus sign
if necessary.)
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