Answer the questions below for the economy of Motak using the graph below. The Economy of Motak Government spending / net taxes 800 700 600 500 400 300 200 100 200 400 600 800 1000 1200 1400 1600 Real GDP NTR G1 Tools / G₂ a. If GDP is $1,000 and government spending is G₁, the size of Motak's budget deficit is $ billion. 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 $[ billion. d. Motak's deficit at this new level of equilibrium GDP is $[ billion.

Answer the questions below for the economy of Motak using the graph below. The Economy of Motak Government spending / net taxes 800 700 600 500 400 300 200 100 200 400 600 800 1000 1200 1400 1600 Real GDP NTR G1 Tools / G₂ a. If GDP is $1,000 and government spending is G₁, the size of Motak's budget deficit is $ billion. 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 $[ billion. d. Motak's deficit at this new level of equilibrium GDP is $[ billion.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter30: Government Budgets And Fiscal Policy

Section: Chapter Questions

Problem 51P: A government starts off with a total debt of $3.5 billion. In year one, the government runs a...

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