9. Let the MPC in the US is 0.80. With no crowding out effect, if the...
9. Let the MPC in the US is 0.80. With no crowding out effect, if the govt. spending increases by $100 billion, then output/GDP will increase by:
a. $20 billion
b. $80 billion
c. $500 billion
d. $1000 billion
10. If the US GDP is less than GNP is year 2017, then which of the following is true?
a. Net Factor Payment (NFP) in 2017 was positive for the USA
b. Net Factor Payment (NFP) in 2017 was negative for the USA
c. Net Factor Payment (NFP) in 2017 was zero for the USA
11. Which of the following statement(s) is true about government budget deficit?
a. If government spends more than it tax revenues, then there will be crowding out effect
b. If government spends more than it tax revenues, then private investment will decrease
c. If government spends more than it tax revenues, then interest rate will increase
d. All of the above
Homework Answers
a) if the MPC is 0.8 then the multiplier in the market will be 5, an increase in the government spending by 100 billion will result in an increase in the output by 500 billion, The answer is "C".
b) "A"
the Net factor payment was positive for the US in 2017 as more people might be sending remittances.
c) "D"
all the statements about the government expenditure are right,
Add Answer to:
9. Let the MPC in the US is 0.80. With no crowding out effect,
if the...
1. Suppose the MPC is 0.8 and the crowding out effect is $30 billion. The government...
1. Suppose the MPC is 0.8 and the crowding out effect is $30 billion. The government aims to increase GDP by $250 billion. a) Calculate the fiscal multiplier b) how much the government needs to increase spending to increase GDP by $250 billion c) Calculate the tax cut multiplier, d) How much the government needs to cut taxes to increase GDP by $250 billion? e) Explain why the tax multiplier is smaller than the fiscal multiplier. f) If you were...
Assume that if there were no crowding out, an increase in government spending would increase GDP...
Assume that if there were no crowding out, an increase in government spending would increase GDP by $100 billion. On the other hand, if there had been full crowding out, then GDP would have Group of answer choices not increased. increased by $100 billion. increased by more than $100 billion. increased by less than $100 billion.
QUESTION 26 In any country the multiplier effect tells us that: O A. If investments increase...
QUESTION 26 In any country the multiplier effect tells us that: O A. If investments increase Tax revenue will increase B. if investments increase savings will increase C. if investments increases GDP will increase OD. If investments increase consumption will increase QUESTION 27 Which of the following statements is true? A. In Pasadena if government spending is $ 1000 billion and tax revenue is $ 800 billion then Pasadena has a budget surplus OB. in Pasadena if government spending is...
(1) Other things being equal, which of the following will increase aggregate expenditures? Group of answer...
(1) Other things being equal, which of the following will increase aggregate expenditures? Group of answer choices An increase in domestic prices relative to foreign prices A decrease in the interest rate A decrease in real wealth An increase in income taxes A decrease in government purchases of goods and services (2) If the current unemployment rate is 5 percent and the natural unemployment rate is 6 percent, then the economy is Group of answer choices producing a level of...
i need answers as soon as possible QUESTION 12 In the aggregate expenditure model if the...
i need answers as soon as possible
QUESTION 12 In the aggregate expenditure model if the government of Pasedonia decides to increase government spending by $ 100 billion and to finance this increase in government spending the government of Pasedonia increases taxes by $ 100 billion what effect will this have on the economy? (assume MPC 0.75) O A GDP stays the same B. GDP increases by $ 100 billion OC. GDP will increase by $ 400 billion OD. GDP...
QUESTION 12 In the aggregate expenditure model if the government of Pasedonia decides to increase government...
QUESTION 12 In the aggregate expenditure model if the government of Pasedonia decides to increase government spending by $ 100 billion and to finance this increase in government spending the government of Pasedonia increases taxes by $ 100 billion what effect will this have on the economy? (assume MPC=0.75) O A GDP stays the same OB GDP increases by $ 100 billion OC. GDP will increase by $ 400 billion D.GDP will decrease QUESTION 13 An example of an automatic...
QUESTION 21 17.6 points Match these concepts Wealth effect Multiplier effect Crowding out effect. Autonomous consumption...
QUESTION 21 17.6 points Match these concepts Wealth effect Multiplier effect Crowding out effect. Autonomous consumption Laffer curve. Automatic stabilizer. Permanent income. Closed economy. Capital deepening. A Economy without foreign sector 6 Spending without income. Fall in investment due to increase in G D Explanation of the slope of AD curve. Long run average level of income. FIncrease capital per worker G Years to double output Lower tax rates lead to higher tax revenues Transfer payments J. 1/MPS. Rule of...
14. (2 pt) Explain the effect of a discretionary cut in taxes of $40 billion on...
14. (2 pt) Explain the effect of a discretionary cut in taxes of $40 billion on the economy when the economy's MPC is .75. How does this discretionary fiscal policy differ from a discretionary increase in government spending of $40 billion? A tax cut of $40 billion will result in initial increase in consumption of S billion). (Note that $10Bil. is saved based on marginal propensity to save (MPS), that is 25 (because 1-MPC-MPS). Then .25 x $40-$10 billion). This...
1. The economy is in long-run equilibrium. Technological change shifts the long-run aggregate supply curve $60...
1. The economy is in long-run equilibrium. Technological change shifts the long-run aggregate supply curve $60 billions to the right. At the same time, government purchases increase by$30 billion. If the MPC equals 0.8 and the crowding-out effect of the government expenditures would reduce aggregate demand by $60 billion, we would expect that in the long-run, A. both real GDP and the price level would be higher. B. both real GDP and the price level would be lower. C. real...
EXERCISE 1:TRUE OR FALSE 1. If the dollar appreciates relative to foreign currencies, we would expect...
EXERCISE 1:TRUE OR FALSE 1. If the dollar appreciates relative to foreign currencies, we would expect a country's net exports to fall. If government decreases its purchases by $20 billion and the MPC is 0.8, equilibrium GDP will decrease by $100 billion. When a private closed economy is at equilibrium, then (GDP-C) is equal to planned investment. If planned investment is larger than saving, then real GDP will increase as the economy adjusts toward equilibrium. 5. Positive net exports increase...
QUESTION 26 In any country the multiplier effect tells us that: O A. If investments increase Tax revenue will increase B. if investments increase savings will increase C. if investments increases GDP will increase OD. If investments increase consumption will increase QUESTION 27 Which of the following statements is true? A. In Pasadena if government spending is $ 1000 billion and tax revenue is $ 800 billion then Pasadena has a budget surplus OB. in Pasadena if government spending is...
i need answers as soon as possible
QUESTION 12 In the aggregate expenditure model if the government of Pasedonia decides to increase government spending by $ 100 billion and to finance this increase in government spending the government of Pasedonia increases taxes by $ 100 billion what effect will this have on the economy? (assume MPC 0.75) O A GDP stays the same B. GDP increases by $ 100 billion OC. GDP will increase by $ 400 billion OD. GDP...
QUESTION 12 In the aggregate expenditure model if the government of Pasedonia decides to increase government spending by $ 100 billion and to finance this increase in government spending the government of Pasedonia increases taxes by $ 100 billion what effect will this have on the economy? (assume MPC=0.75) O A GDP stays the same OB GDP increases by $ 100 billion OC. GDP will increase by $ 400 billion D.GDP will decrease QUESTION 13 An example of an automatic...
QUESTION 21 17.6 points Match these concepts Wealth effect Multiplier effect Crowding out effect. Autonomous consumption Laffer curve. Automatic stabilizer. Permanent income. Closed economy. Capital deepening. A Economy without foreign sector 6 Spending without income. Fall in investment due to increase in G D Explanation of the slope of AD curve. Long run average level of income. FIncrease capital per worker G Years to double output Lower tax rates lead to higher tax revenues Transfer payments J. 1/MPS. Rule of...
14. (2 pt) Explain the effect of a discretionary cut in taxes of $40 billion on the economy when the economy's MPC is .75. How does this discretionary fiscal policy differ from a discretionary increase in government spending of $40 billion? A tax cut of $40 billion will result in initial increase in consumption of S billion). (Note that $10Bil. is saved based on marginal propensity to save (MPS), that is 25 (because 1-MPC-MPS). Then .25 x $40-$10 billion). This...
EXERCISE 1:TRUE OR FALSE 1. If the dollar appreciates relative to foreign currencies, we would expect a country's net exports to fall. If government decreases its purchases by $20 billion and the MPC is 0.8, equilibrium GDP will decrease by $100 billion. When a private closed economy is at equilibrium, then (GDP-C) is equal to planned investment. If planned investment is larger than saving, then real GDP will increase as the economy adjusts toward equilibrium. 5. Positive net exports increase...
Most questions answered within 3 hours.
-
Where is the error in this code sequence?
String s1 = "Hello";
String s2 = "ello";...
asked 10 months ago -
Financial data for Joel de Paris, Inc., for last year
follow:
Joel de Paris, Inc.
Balance...
asked 10 months ago -
Consider this reaction:
Al2(SO4)3 (aq)+ BaCl3
(aq) Al2Cl6 (aq)- +
3BaSO4(s) . What is the...
asked 10 months ago -
Suppose that Savneet is considering increasing her
recent random sample from 20 car rentals to 40...
asked 10 months ago -
Trucks arrive at an unloading terminal at an average rate of 120
per hour.
Trucks arrive...
asked 10 months ago -
Why are methanol and ethanol completely soluble in water while
octanol is not very little soluble....
asked 10 months ago -
A facilities manager at a university reads in a research report
that the mean amount of...
asked 10 months ago -
When the CuSO4 is rehydrated by adding water to the anhydrous
compound, is this an endothermic...
asked 10 months ago -
A ray of sunlight is passing from diamond into crown glass; the
angle of incidence is...
asked 10 months ago -
A block of mass 0.249 kg is placed on top of a light, vertical
spring of...
asked 10 months ago -
how do the kidneys compensate in the presences of acidosis
a) trigger hyperventilate
b) reserve acid...
asked 10 months ago -
Question 501 pts
The rental rate of capital to the firm increases. Which of the
following...
asked 10 months ago