PotentialGDP450C+l+G+X-IM)FT4,000 5,000 6,000Real GDP(billions of dollars per year)In Figure 11-1, the slope of the expenditures schedule is 0.75, and the govemment wishes to achieve full employment. It shouldcut spending by 1,000.increase spending by 250.cut taxes by 1,000.cut taxes by 250.increase spending by 1,000.Real Expenditure

Recessionary gap is when Real GDP is less than potential GDP.

Potential GDP C+1+G+X-IM) ,00 5,000 6,000 Real GDP (billions of dollars per year) In Figure 11-1, the slope of the expenditures schedule is 0.75, and the govermment wishes to achieve full employment. It should O cut spending by 1,000. increase spending by 250. cut taxes by 1,000. cut taxes by 250. increase spending by 1,000. Real Expenditure

Potential GDP C+1+G+X-IM) ,00 5,000 6,000 Real GDP (billions of dollars per year) In Figure 11-1, the slope of the expenditures schedule is 0.75, and the govermment wishes to achieve full employment. It should O cut spending by 1,000. increase spending by 250. cut taxes by 1,000. cut taxes by 250. increase spending by 1,000. Real Expenditure

MACROECONOMICS FOR TODAY

10th Edition

ISBN:9781337613057

Author:Tucker

Publisher:Tucker

Chapter5: Gross Domestic Product

Section: Chapter Questions

Problem 6SQP

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Figure 3-3 45° Planned Expenditure 200 + 0.75Y 45 Income (Y) In the figure above: a. Find the equilibrium GDP. What happens to the left of that equilibrium? What happens to the right? b. When income is $1,000, what is the unplanned inventory? c. What is the GDP multiplier? d. What is the tax multiplier? e. How much should government expenditures increase if the government wants to increase GDP from the equilibrium level found at point a) to 1,000? f. How much should taxes decrease if the government wants to increase GDP from the equilibrium level found at point a) to 1,000? Planned Expenditure
Exercise D24 Compare two policies: a tax cut on income or an increase in government spending on roads and bridges. What are both the short-term and longâ€”term impacts of such policies on the economy?
24. Which of the following is used as a remedial measure during a recession in an economy? a.Decrease taxes and increase government spending b.Increase taxes and government spending c.Decrease taxes and government spending d.Increase taxes and decrease government spending
Gross Real GDP (after taxes) Investment $10 10 ITTIT 20 10 10 10 10 10 10 40 70 100 130 160 Consumption $-20 100 K Net exports +5 45 Government purchaies $15 7. Refer to the above table. If the full-employment real GDP is $70 the 15 15 15 15 15 15 OA) A. inflationary expenditure gap is $30. OB) B. recessionary and inflationary expenditure gaps are both $0. OC) C. inflationary expenditure gap is $10. OD) D. recessionary expenditure gap is $10.
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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.
3@ An economy has neither imports nor income taxes. The MPC is 0.75 and the real GDP is $120 billion. The government increases expenditures by $4 billion. The multiplier is _____ and the change in real GDP from the increase in government expenditures is _____ billion.
7. Deriving and exploring the total expenditures curve The following graph shows total production (TP) and the level of Natural Real GDP (NRGDP) for a hypothetical economy. When Real GDP is $450 billion, consumption is $375 billion, government purchases are $30 billion, and investment is $70 billion. When Real GDP is $500 billion, consumption is $400 billion, government purchases are $30 billion, and investment is $70 billion. Use the blue line (circle symbol) to plot the economy's total expenditure function within a simplified Keynesian framework. TOTAL EXPENDITURE (Billions of dollars) 600 575 550 525 500 475 450 425 400 400 TP O 425 X NRGDP O 450 475 500 525 REAL GDP (Billions of dollars) 550 575 600 TE (?
Y C I G X $ 100 $ 120 $ 20 $ 30 $ 10 $ 300 $ 300 $ 20 $ 30 - $ 10 $ 500 $ 480 $ 20 $ 30 - $ 30 $ 700 $ 660 $ 20 $ 30 - $ 50 14.If government spending increases by $ 15, what is the new equilibrium level of the real GDP? If government spending increases by $ 15 then to find the new equilibrium I can use the recessionary GAP formula Recessionary GAP = GDP Gap / Spending Multiplier (5) 15 = GDP Gap (5) 5 75 = GDP Gap GDP Gap + Old equilibrium level of the real GDP =…
15. If consumers in a country spend 3/4 of their disposable income. If their governmentincreases its spending by 75 trillion and in order to maintain a balanced budgetsimultaneously increases taxes by 75 trillion. Calculate the effect of the 75 trillion change ingovernment spending and 75 trillion change in taxes on the country’s aggregate demand.
Some politicians have suggested that the United States enact a constitutional amendment requiring that the Federal government balance its budget annually. Such an amendment, f strictly enforced, would force the government to enact a contractionary fiscal policy whenever the economy experienced a severe recession. This is because when the economy enters a recession, 0000 net tax revenue falls and transfer payments rise. Balancing the budget would require raising transfer payments and raising taxes. net tax revenue rises and transfer payments fall. Balancing the budget would require raising transfer payments and lowering taxes. net tax revenue falls and transfer payments rise. Balancing the budget would require lowering transfer payments and raising taxes net tax revenue rises and transfer payments fall. Balancing the budget would require lowering transfer payments and lowering taxes
Only typed answer and please don't use chatgpt Suppose the tax multiplier in an economy is -3. How will total spending (TS) change when taxes (T) increase by $300? Group of answer choices TS will decrease by $900 TS will decrease by $100 TS will increase by $900 TS will increase by $100