Identify the difference between the government expenditure and government purchase.

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Answer 1

Question

Chapter 11, Problem 1QP

To determine

Identify the difference between the government expenditure and government purchase.

Expert Solution & Answer

Explanation of Solution

The government expenditure is the broader definition of government spending, and the government purchase is the narrow definition of the government spending. In the accounting of government expenditure, it indicates the sum total of government purchases plus the transfer payments of the government, whereas the government purchases do not include the transfer payments in its calculation.

Economics Concept Introduction

Government spending: Government spending is the amount of money used by the government for funding its programs and operations.

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Short Description Fiscal Policy Graph Details Shown is a Fiscal Policy diagram with the variable Real GDP (billions of dollars) on the x-axis and the variable Price Level on the y-axis. The x-axis is scaled from 0 to 800 billion dollars with an increment of 40 billion dollars, and the y-axis is scaled from 30 to 150 units with an increment of 5 units. Object Details On the graph we have:Four Line Objects:An upward sloping Aggregate Supply, AS line with two endpoints:Point 1 at (160, 70)Point 2 at (720, 140)A downward sloping Aggregate Demand, AD1 line with two endpoints:Point 1 at (80, 110)Point 2 at (640, 40)A vertical Long-run Aggregate Supply, LRAS with two endpoints:Point 1 at (400, 145)Point 2 at (400, 30)A downward sloping Aggregate Demand, AD line with two endpoints:Point 1 at (720, 60)Point 2 at (160, 130)Two Reference Points:Lines AS, AD, and LRAS intersect at (400, 100)Lines AS and AD1 intersect at (280, 85) a. How much does aggregate demand need to change to restore the…

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a. How much does aggregate demand need to change to restore the economy to its long-run equilibrium? $ billion b. If the MPC is 0.6, how much does government purchases need to change to shift aggregate demand by the amount you found in part a? $ billion Suppose instead that the MPC is 0.95. c. How much does aggregate demand and government purchases need to change to restore the economy to its long-run equilibrium? Aggregate demand needs to change by $ billion and government purchases need to change by $ billion.

Answer 2

Question

Chapter 11, Problem 1QP

To determine

Identify the difference between the government expenditure and government purchase.

Expert Solution & Answer

Explanation of Solution

The government expenditure is the broader definition of government spending, and the government purchase is the narrow definition of the government spending. In the accounting of government expenditure, it indicates the sum total of government purchases plus the transfer payments of the government, whereas the government purchases do not include the transfer payments in its calculation.

Economics Concept Introduction

Government spending: Government spending is the amount of money used by the government for funding its programs and operations.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 11, Problem 1QP

To determine

Identify the difference between the government expenditure and government purchase.

Expert Solution & Answer

Explanation of Solution

The government expenditure is the broader definition of government spending, and the government purchase is the narrow definition of the government spending. In the accounting of government expenditure, it indicates the sum total of government purchases plus the transfer payments of the government, whereas the government purchases do not include the transfer payments in its calculation.

Economics Concept Introduction

Government spending: Government spending is the amount of money used by the government for funding its programs and operations.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 11, Problem 1QP

To determine

Identify the difference between the government expenditure and government purchase.

Expert Solution & Answer

Explanation of Solution

The government expenditure is the broader definition of government spending, and the government purchase is the narrow definition of the government spending. In the accounting of government expenditure, it indicates the sum total of government purchases plus the transfer payments of the government, whereas the government purchases do not include the transfer payments in its calculation.

Economics Concept Introduction

Government spending: Government spending is the amount of money used by the government for funding its programs and operations.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 11, Problem 1QP

To determine

Identify the difference between the government expenditure and government purchase.

Expert Solution & Answer

Explanation of Solution

The government expenditure is the broader definition of government spending, and the government purchase is the narrow definition of the government spending. In the accounting of government expenditure, it indicates the sum total of government purchases plus the transfer payments of the government, whereas the government purchases do not include the transfer payments in its calculation.

Economics Concept Introduction

Government spending: Government spending is the amount of money used by the government for funding its programs and operations.

Answer 6

Chapter 11, Problem 1QP

To determine

Identify the difference between the government expenditure and government purchase.

Expert Solution & Answer

Explanation of Solution

The government expenditure is the broader definition of government spending, and the government purchase is the narrow definition of the government spending. In the accounting of government expenditure, it indicates the sum total of government purchases plus the transfer payments of the government, whereas the government purchases do not include the transfer payments in its calculation.

Economics Concept Introduction

Government spending: Government spending is the amount of money used by the government for funding its programs and operations.

Answer 7

Chapter 11, Problem 1QP

To determine

Identify the difference between the government expenditure and government purchase.

Answer 8

Expert Solution & Answer

Explanation of Solution

The government expenditure is the broader definition of government spending, and the government purchase is the narrow definition of the government spending. In the accounting of government expenditure, it indicates the sum total of government purchases plus the transfer payments of the government, whereas the government purchases do not include the transfer payments in its calculation.