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• Tax rate = 12.5% • Government expenditure = 100 1. The new aggregate expenditure function is AE = %3D Y 2. The new multiplier is 3. The new equilibrium GDP is Y =

• Tax rate = 12.5% • Government expenditure = 100 1. The new aggregate expenditure function is AE = %3D Y 2. The new multiplier is 3. The new equilibrium GDP is Y =

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Need help with 1 through 9 please.

Suppose now a government is established: • Tax rate = 12.5% • Government expenditure = 100 1. The new aggregate expenditure function is AE = Y 2. The new multiplier is 3. The new equilibrium GDP is Y = 4. The new output gap is 5. The government's budget balance function is BB = Y 6. The government's budget balance at the equilibrium is which is a 7. The structural budget balance is SBB = which is a 8. What level of government spending would close the output gap? 9. As a result, the government's new (structural) budget balance is
Transcribed Image Text:Suppose now a government is established: • Tax rate = 12.5% • Government expenditure = 100 1. The new aggregate expenditure function is AE = Y 2. The new multiplier is 3. The new equilibrium GDP is Y = 4. The new output gap is 5. The government's budget balance function is BB = Y 6. The government's budget balance at the equilibrium is which is a 7. The structural budget balance is SBB = which is a 8. What level of government spending would close the output gap? 9. As a result, the government's new (structural) budget balance is
An economy with no government is described by the following: • Marginal propensity to consumer = 0.8 • Marginal propensity to import = 0.2 • Autonomous expenditure = 500 • Potential GDP = 1500
Transcribed Image Text:An economy with no government is described by the following: • Marginal propensity to consumer = 0.8 • Marginal propensity to import = 0.2 • Autonomous expenditure = 500 • Potential GDP = 1500
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Disclaimer :- as you posted multipart questions we are supposed to solve the first 3 questions only as per the guidelines. 

aggregate expenditure or e say aggregate demand is the summation of consumption , Investment , government expenditure and net export. 

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