The following data are for the economy of Moksha. C=40+0.8Y I=70 G= 210 XN= 50 -0.2Y a. Calculate equilibrium GDP. Equilibrium GDP is $ b. Calculate the multiplier.Round your answer to 2 decimal places. The multiplier is 2.5 c. If the tax function is T = 20+ 0.2Y, the size of the budget deficit 5. Round your answer to 1 decimal place. d. Now, change government spending, by the size of the surplus, or deficit, in an attempt to balance the budget. What will be the new equilibrium income? Round your answer to 1 decimal place. New equilibrium GDP is $ e. At the new equilibrium there is a budget deficit 925 os $ is $ Round your answer to 2 decimal places.

The following data are for the economy of Moksha. C=40+0.8Y I=70 G= 210 XN= 50 -0.2Y a. Calculate equilibrium GDP. Equilibrium GDP is $ b. Calculate the multiplier.Round your answer to 2 decimal places. The multiplier is 2.5 c. If the tax function is T = 20+ 0.2Y, the size of the budget deficit 5. Round your answer to 1 decimal place. d. Now, change government spending, by the size of the surplus, or deficit, in an attempt to balance the budget. What will be the new equilibrium income? Round your answer to 1 decimal place. New equilibrium GDP is $ e. At the new equilibrium there is a budget deficit 925 os $ is $ Round your answer to 2 decimal places.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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What is the spending multiplier for the north laurisian economy
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a) Write the equation representing snapshot of budget and Indicate the status of the budget as having a surplus or deficit, or balanced at Zero and explain why? How is this budget expected to affect the GDP? Explain! (b) Use the lump-sum tax and the MPC to calculate the decrease in consumption due to this lump sum tax (show all your calculations); then use the change in consumption you just obtained to find the consumption after tax (ca-fill in the column 7 below). (c) Use the Ca to find the (after-tax) aggregate expenditures for the 4-sector private-public-open economy (AEa) and fill in the column 8; Now use the column 1 and column 8 to find the new equilibrium GDP and DI in the 4-sector model. (d) Has GDP increased in the 4-sector compared with those in the previous 3-sector equilibrium? If so, by how much? What is the effective multiplier from 3-sector to 4-sector and why? Explain. (e) Has DI changed from 3-sector to 4-sector? Why/why not? How about consumption and savings? Explain…
Chapter 11 Answer exercises 11-14 on the basis of the following information. Assume that equilibrium real GDP is $ 800 billion, potential real GDP is $ 950 billion, the MPC is .80, and the MPI is .40. 11.What is the size of the GDP gap? 12.How much must government spending increase to eliminate the GDP gap? 13. How much taxes fall to eliminate the GDP gap? 14. If government spending and taxes both change by the same amount, how much must they change to eliminate the recessionary gap? 15. Suppose the MPC is .90 and the MPI is .10. If government expenditures go up $ 100 billion while taxes fall $ 10 billion, what happens to the equilibrium level of real GPD? Use the following equations for exercises 16-18 C = $ 100 + .8 Y I = $ 200 G = $ 250 X = $100 - .2 Y 16. What is the…