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I'm doing some practice questions, theyre all true or false. yall will probably be getting more from me seeing as how they are all true or false and that makes it harder for me.
the question is true or false:
If the MPC is .98 and GOVT spending increases by $10 AD will increase by $450.
Idk how to solve for this with so little information. my equation I would have used for this is: deltaY*= K x deltaG (delta meaning change, dont have that on my computer keyboard)
to solve for K= 1/ (1-MPC)
I plugged in 10= 50 x deltaG and got 20. that cant be right. was i supposed to put 450 in place of deltaY*?
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- Under what general macroeconomic circumstances might a government use expansionary fiscal policy? When might it use contractionary fiscal policy?The spending multiplier, m, is V - MPC). af the MPC is 0.9, what is the spending muitiplier? bị Now suppose government spending increases by $90 million By how much will GDP rise? milionPlease see attachment Answer neatly Show all your work. Based on the above diagram: 1. Calculate MPC? 2. If Private Investment increases by 100, calculate the new level of NI. 3. If full-employment NI is at 3000, by how much should Government spending change? 4. What is the new NI, If 1/2 of those government expenditures are financed through taxes?
- In our construction of the savings and investment model, weconsidered government spending to be immediate spending. In otherwords, there was no “investment” component to government spending.Let’s change up that assumption. Suppose government spending comesin two types: investment spending (new airports, for example) aswell as government consumption (snow plowing, for example). Callthe first GI and the second GCE.Suppose MPC equals 0.9, government taxes 30% of all incomes, and the marginal propensity to import equals 0.07. The economy's real GDP is currently $5,454 billion while its potential real GDP is $6,000 billion. Glven a horizontal SRAS curve, what change in government spending on goods and services would bring the economy to full employment real GDP? When doing the calculations, round the value for the multiplier to 2 decimal places, and round your final value for the change in G to the nearest billion.posting this again, can you tell me which questions i've gotten wrong? i dont need any explanations for the ones i've gotten right. i just dont know which ones i've missed- if you could explain those that'd be fantastic. thanks 4- Tax cuts in the classical range of the AS will stimulate output and unemployment -false 5- Increasing welfare payments by borrowing money to do so will increase AD- true 6- if the mpc increases, the multiplier decreases- false 7- if the mps increases the multiplier decreases -true 8- part of the cost of growing government budget deficits is and “opportunity cost” of what else could have been done with the money, particularly if the borrowing is used to increase consumption spending. -true 9- tax cuts in the classical range of the AS curve will stimulate output and employment. -true 10- if the AS curve were flat/horizontal an increase in AD would not be inflationary- true 11- an increase in AD might be cause by improving technology in manufacturing processes.…
- a. In the textbook, you read that Tyler does not save and planaccording to the theory of Ricardian equivalence but Alex is moreof a “Ricardian.” In light of this, who probably cuts back theirspending the most when taxes temporarily rise: someone like Tylerwho is not “Ricardian” or someone like Alex who is?b. If the U.S. government wants to use fiscal policy to shift ADaround easily, which one would the U.S. government prefer tomake more copies of: Tyler or Alex?The partial data in the table below are for the economy of Arinaka. Planned investment, government spending, and all taxes are autonomous. You may assume that the MPC, MPS, and MPM are constant. a. Fill in the blanks in table below. Y $800 850 900 950 T $120 120 120 120 YD 680 775 870 965 C $640 730 820 910 S $40 45 50 55 I $100 100 100 100 G $90 b. The value of equilibrium income is $ c. If planned investment decreases by $20, the new value of equilibrium income is $ 90 90 90 XN $10 -5 AE Unplanned InvestmentExplain, using appropriate diagrams, how a rise in the household saving rate cancause a fall in GDP, and how a fiscal stimulus might offset this.
- When the MPC increases: a. the government spending multiplier stays the same b. the government spending multiplier decreases c. the government spending multiplier also increases d. the government spending multiplier could increase or decreases e.depending on whether government spending is increasing or decreasingIif the MPC= 75, how much of an increase in Government Spending woud take to shit the economy trom the short unguibrumat GOP0OM e long un utrum GOP=144M (l else equal Select one a $22M b $44M C. $0 SM d. $11MThe cost of rebuilding the Philippines after typhoon Haiyan could reach USD 5.8bn”, a senior official has said. Assume the government of Australia Department of Foreign Affairs and Trade provided a grant of USD 5.8 billion. Also assume that despite the hardships the Philippine families experienced, 15% was the beneficiary savings from the Australian grant. Further, assume all other factors remain constant.a. Calculate the total effect of the spending multiplier of the Australian government grant on the Philippine economy GDP growth. b. Examine the overall multiplier effect of the USD5.8 billion grant on the Philippine economy. Answer asap n correctly with proper typed explanation
