Suppose the government increases expenditures by $50 billion and the marginal propensity to consume is 0.90. By how much will equilibrium GDP change? The change in equilibrium GDP is: $ billion. (Round your solution to one decimal place.)
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- Suppose the government increases expenditures by $100 billion and the marginal propensity to consume is 0.50. By how will equilibrium GDP change? The change in equilibrium GDP is: $ billion. (Round your solution to one decimal place.)Suppose that exports increase by $300 billion, given an MPC of.75. Calculate the change in GDP. Give your answer in billions and leave off the dollar sign. Be sure to include a negative sign if appropriate.C= 1000+ 0.8(Y-T), 1 = 500, G=800, T = 500. Suppose that government spending FALLS by 200. What is the change in equilibrium GDP? (Round your answer to the nearest whole number, and do not use commas in your answer.)
- a) About Country A, what is your estimate of the country's marginal propensity to consume (MPC) based on the following information on its GDP (Y) and the components thereof (in billion dollars) for two past years? Show calculation. Year 1 Year 2 c) GDP C I 11200 8000 2200 12000 8500 2400 G 800 880 The next few parts are about Country B, whose government plans to cut taxes by $24 billion as a measure to fight the current recession. The marginal propensity to consume (MPC) in Country B is known to be 34. There will be no crowding-out effect. e) NX 200 220 b) What is the initial effect (in billion dollars) of the tax cut on Country B's aggregate demand? (The "initial effect" here refers to the effect on AD after only the first round of increased spending.) What is the total effect of the tax cut on aggregate demand? Explain why it is different from the initial effect. d) How does the total effect of this $24 billion tax cut compare to the total effect of a $24 billion increase in…If takes are decreased by $200 billion, given an MPC of.6, calculate the change in GDP. Give your answer in billions.A $300 million decrease in investment spending will increase real GDP by more than $300 million. Is this a true statement? What is the relationship between investment spending and the GDP? I think that investment spending goes directly into the economy so I believe the answer to be true. But I am not sure.
- Suppose the marginal propensity to consume (MPC) is either 0.75, 0.96, or 0.62. a. For each value of the MPC, calculate the impact of a one-dollar decrease in taxes on GDP. Instructions: Enter your responses rounded to one decimal place. MPC Impact of a one-dollar decrease in taxes 0.75 0.96 0.62 b. For each value of the MPC, calculate the impact on GDP of a $250 million decrease in taxes. Instructions: Enter your responses rounded to one decimal place. MPC Impact on GDP 0.75 $ 0.96 $ 0.62 $ Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.Examine the graph above. Suppose that government increases its spending, shifting the aggregate expenditure line upwards. GDP increases from GDP1 to GDP2, and this amount is $550 billion. If the MPC is 0.8, calculate the difference between the points N and L to find out by how much the government spending changed.The country is experiencing a serious rise in inflation which the government wants to control through fiscal policy. The Government will decrease spending by $20 million and increase taxes by $15 million. The marginal propensity to consume (MPC) is 0.80. What will be the effect on GDP and by how much?
- if investment is $0.5 trillion, government spending is $1 trillion, and next exports are -$0.5 trillion, the equilibrium GDP is:The aggregate demand function: yad =C+1+G₁ = 500+ 0.75Y is plotted on the graph to the right. The graph also shows the 45° line where aggregate output Y equals aggregate demand yad for all points. What happens to aggregate output if government spending rises by 100? The equilibrium level of output rises by $ billion. (Round your response to the nearest billion.) Consumption Expenditure, C ($ billions) 3000- 2800- 2600- 2400- 2200- 2000- 1800- 1600- 1400- 1200- 1000- 800- 600- 400- 200- 0- 0 yad =C+I+G₁ = 500 +0.75Y Y = yad 45° 400 800 1200 1600 2000 2400 2800 Disposable Income ($ billions)The marginal propensity to consume (MPC) is 0.75. The multiplier is 4. (Round your answer to one decimal place.) Suppose that government spending changes by S- 400. The change in real GDP will be S . (Round your answer to the nearest dollar.)