a. If GDP is $800 and government spending is G₁, the size of Motak's budget deficit is $ b. If government spending is decreased by the size of the deficit in part (a), draw the new curve labelled G₂ in the graphing area above. c. Suppose the multiplier has a value of 2, the new level of equilibrium GDP is $ d. Motak's deficit at this new level of equilibrium GDP is $ billion. billion. billion.

a. If GDP is $800 and government spending is G₁, the size of Motak's budget deficit is $ b. If government spending is decreased by the size of the deficit in part (a), draw the new curve labelled G₂ in the graphing area above. c. Suppose the multiplier has a value of 2, the new level of equilibrium GDP is $ d. Motak's deficit at this new level of equilibrium GDP is $ billion. billion. billion.

Macroeconomics

13th Edition

ISBN:9781337617390

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter11: Fiscal Policy And The Federal Budget

Section: Chapter Questions

Problem 1QP

See similar textbooks

Similar questions

How would you describe the relationship between corporate taxes and the GDP of a country?
learn-us-east-1-prod-fleet01-xythos.content.blackboardcdn.com Bb https://.. a SD Bb Bb Bb 1. From the time of George Washington's presidency to the present, the percentage of the average American's income that goes to pay taxes A. has decreased from about 20 percent to about 10 percent. has decreased from about 50 percent to about 25 percent. C. has remained constant at about 10 percent. D. has risen from less than 2 percent to above 45 percent. Е. В. has risen from less than 5 percent to above 25 percent. 2. According to the textbook, which of the following statements is (are) correct for the United States? (x) The individual income tax and the payroll tax are the two largest sources of revenue for the U.S. federal government. (y) Corporate income taxes and excise taxes make up more than 30 percent of the tax revenue for the U.S. federal government. (z) In general, the two most important taxes for state and local governments in the U.S are sales taxes and property taxes. А. (x), (y)…
Economist Arthur Laffer famously pointed out that, in some cases, income tax revenue can actually go up when tax rates go down. Why might this be the case?
Agricultural price supports result in governments holding large inventories of agricultural products. Why do you think the government cannot simply give the products away to poor people?
Answer the questions below for the economy of Motak using the graph below. Government spending / net taxes 800 700 600 500 400 300 200 100 0 G₂ The Economy of Motak 200 400 600 800 1000 1200 1400 1600 Real GDP NTR G1 Tools / G2 i
Illustrate each of the following situations with a graph showing IS curve: a. An increase in government spending b. An increase in taxes
Analyze the graph below, showing the Gross Federal Debt as a percentage of GDP for the United States (1939-2019). Which of the following is correct? FRED d- Gre ederal Dea Percentof Gr Done Produd 116 2013 Pa S Sor O e Loa fe In 2019, the Federal Government of the United States had an accumulated debt/GDP higher than 100 %, meaning that the amount of debt accumulated over time is higher than the value of all goods and services produced in that year. The debt/GDP is always positive during this period, so the Federal Government of the United States incurred in budget deficits every year since 1939. From the mid-40s until the mid-70s, the debt/DGP was decreasing, meaning that the Federal Government. of the United States was running a budget surplus every year during those three decades. During the second half of the 1970s, the Federal Government of the United States was able to keep a balanced budget and, as a result, the debt/GDP was close to zero.
Illustrate each of the following situations with a graph showing IS curve: a. An increase in taxes
What is the effect of government purchased and taxation on the level of income?
The table gives the government outlays and tax revenues from 2015 through 2019 for two countries. Year Country A Government outlays (trillions of 2012 dollars) Country A Tax revenue (trillions of 2012 dollars) Country B Government outlays (trillions of 2012 dollars) Country B Tax revenue (trillions of 2012 dollars) 2015 0.75 0.80 1.05 1.10 2016 0.80 0.83 0.90 0.92 2017 0.87 0.86 0.87 0.88 2018 0.95 0.95 0.85 0.83 2019 1.06 1.02 0.70 0.75 In 2017 country A had a ________ and country B had a ________. A. budget deficit; budget deficit B. budget surplus; budget deficit C. budget surplus; budget surplus D. budget deficit; budget surplus E. balanced budget; budget deficit
Question 18/28 > NEXT A BOOKMARK 18 According to the pie chart, which of the following provides the most revenue for the federal government? Federal Tax Revenue 2015: $3.18 trillion Corporate Inco Taxes Miscellaneous Individual Income Taxes Excise Taxes $1.48 trillion 47% Customs Duties Payroll Taxes $1.07 trillion 34% nationalpriorities.org PRIORITIES A Individual income taxes B Corporate taxes C Payroll taxes D Excise taxes DELL -> @ # $ 7 8. 1 4 W e y < O 5
Use a circular flow diagram to illustrate how the allocation of resources is affected by government’s revenue and expenditure decisions.