Use the Simple Classical Macroeconomic Model to answer this question. Suppose the tax cut has not been enough to stimulate sufficient job growth. The government passes infrastructure improvement legislation to increase government spending from $3,000 to $4,000. What is the affect on GDP from the combined changes (Taxes and Spending) in government policies? a. 53,000 b. 60,000 c. 26,500 d. 33,000
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- Based on the economic data of a country presented in the following table, complete the table! Question: a. Based on this information, complete the blank data. b. Determine what level of equilibrium income, consumption and savings are at equilibrium c. If there is an increase in government spending by 50 what is the new level of national income. d. how big is the multiplier in this model? What does it mean? e. Draw a graph of the balance of national income and its changesReal GDP Consumption Planned Investment Government Purchases Net Exports $5,000 $4,500 $500 $325 -125 6,000 5,300 $500 $325 -125 7,000 6,100 $500 $325 -125 8,000 6,900 $500 $325 -125 3 A Answer the questions based on the table below. The values are in millions of dollars. What is the equilibrium level of real GDP? What is the MPC? If potential GDP is $7,000 million, is the economy at full employment? If not, what is the condition of the economy? If the economy is not at full employment, by how much should government spending increase so that the economy can move to the full employment level of GDP?1. Country X has following data: C = 20 + 0.8Y4, I = 30, G = 40, Tx = 20, T, = 15, X = 60, M = 20 + 0.04Y, incoming year growth target is 600, All figures is billion. Please calculate: a. National income equilibrium! b. Consumption and saving equilibrium! c. Government income from tax! d. How much change in government consumption if they want to achieve growth target?
- c Suppose the real GDP in an economy is currently $320 billion, C is $160 billion, I is $50 billion, G is $32 billion, and Nx is $-20 billion. What can you say about the state of equilibrium in this economy? Will its real GDP rise, fall, or stay the same? Explain.Answer the following questions, which relate to the aggregate expenditures model: Instructions: Enter your answer as a whole number. a. If Ca is $100, lg is $50, X, is -$10, and Gis $30, what is the economy's equilibrium GDP? 2$ b. If real GDP in an economy is currently $20o, Ca is $100, lg is $50, X, is -$10, and Gis $30, will the economy's real GDP rise, fall, or stay the same? |(Click to select) c. Suppose that full-employment (and full-capacity) output in an economy is $200. If Cą is $150, Ig is $50, Xn is -$10, and Gis $30, what will be the macroeconomic result? O There will be an inflationary expenditure gap and employment levels will be above the full-employment level. O There will be an inflationary expenditure gap and employment levels will be below the full-employment level.a. The key idea of the aggregate expenditure model is that in any particular year, the level of GDP is determined mainly by A) investment spending. B) export spending. C) government spending. D) the level of aggregate expenditure. b. U.S. net export rises when A) the price level in the United States rises relative to the price level in other countries. B) the growth rate of U.S. GDP is slower than the growth rate of GDP in other countries. C) the value of the U.S. dollar increases relative to other currencies. D) the inflation rate is higher in the United States relative to other countries.
- How did government purchases and real GDP co-move during and afterthe Great Recession?The following are a year's data for a hypothetical economy. Comsmption $400B, Government purchases $350B, GDPI $150B, Exports $150B, Imports $100B, Depreciation $50B. a) what is the value of GDP and NDP? b) what is the value of Net private Domestic investment ? c) suppose that in the next year exports increases to $175B, imports increase to 200B, and consumption falls to 350B. What will GDP be in that year?Fluctuation of savings and investment rates impact on GDP of any macroeconomics. Comment with the help of example and graphically as wel
- Businesses in the nation of Islandia have been accumulating cash because they have a pessimistic outlook of the national economy. Recent changes in the economic outlook of Islandia have caused business leaders to begin to invest some of their accumulated cash. Suppose that businesses in the country invest a total of $40 billion of this cash. Instructions: Enter a positive number to show an increase and a negative number to show a decrease. a. What would be the maximum expected change in GDP if Islandia's marginal propensity to consume (MPC) is 0.75? $ billion b. Suppose that the recent economic outlook in the country of Mountainia has been the opposite. Businesses have postponed planned investments and have begun to accumulate cash. If businesses in Mountainia postpone $12 billion of their planned investments, what would be the maximum expected change in GDP if its marginal propensity to save (MPS) is 0.05? $ billionT Normal 1 No Spac. Heading 1 Headin Paragraph Q1:You are given the following income-expenditures model for an economy: Consumption C = 300 + .64Yd Tax (T) = $60 %3D Government expenditure G= $100 Investment (I) = $120 %3D From above data calculate the follows: 3. At the equilibrium level of income, what is the amount of savings?Suppose the government increases expenditure towards education and training programs. The intended effect at the macroeconomic level would be? a.To increase net exports, which in turn increases GDP. b.To increase government spending, which in turn increases GDP. c.To increase consumption, which in turn increases GDP. d.To increase private investment today, which in turn increases GDP.
