Assume that taxes depend on income and the MPC is 0.8 and tis 0.4. An increase in taxes of $10 billion will decrease equilibrium income by Select one: O a. $15.4 billion. O b. $25 billion. O c. $19.2 billion. O d. $27 billion.
Q: 2. Consider an economy where aggregate demand AD consists of aggregate con- 1000 and government =…
A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and…
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A: MPC = 0.80 EXCESS AD = $1200 MILLION…
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A: * SOLUTION :- As per guidelines I answered three sub parts only Thankyou.
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A: The equilibrium condition: Y = C+I+G.
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A: please find the answer below.
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A: Given:Tax multiplier=-6Change in tax=$100 billion
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A: RGDP Tax DI C S I G X-M Planned AE Chg in Inv 5 1 4 3.7 0.3 1 0.8 -0.5 5 - 5.5 1 4.5 4.1 0.4 1.1…
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Q: Quèstion 16 If the MPC in the economy is 0.75, government could shift the aggregate demand curve…
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A: This policy would be weaker because it would be temporary.
Q: Suppose that the MPC is 0.80 and there is an AD excess of $1,200 million. Which of the following is…
A: Since you have posted multiple question, we will solve the first question for you. If you want any…
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- When government spending increases by $1, planned expenditures increase by $1 O A. times the spending multiplier and the equilibrium level of income will increase by $1. O B. and the equilibrium level of income will increase by $1. O C. and the equilibrium level of income will increase by $1 times the spending multiplier. O D. and the equilibrium level of income will increase by less than $1. When taxes are cut by $1, planned expenditures O A. decrease by $1 and the equilibrium level of income will decrease by $1 times the tax multiplier. O B. increase by less than $1 and the equilibrium level of income will increase by $1 times the tax multiplier. OC. increase by $1 and the equilibrium level of income will increase by S1 times the tax multiplier. O D. increase by $1 and the equilibrium level of income will increase by $1 times the spending multiplier. Click to select your answer! V560If taxes depend on income and the MPC is 0.8 and tis 0.4, the tax multiplier is Select one: O a. -2.7. O b. -1.92. O c. -2.5. O d. -1.54.The formula for the tax multiplier is Select one: O + 1). a.-MPC/(MPC O b. MPC/ (1 + MPC). Oc1/(1- MPC). C.1 Od.-MPC / (1 - MPC).
- To minimize GDP fluctuations, the government should run a budgetin times of recession and a budget in times of boom. O a. Deficit; deficit O b. Deficit; surplus O c. Surplus; surplus O d. Surplus; deficitQUESTION 16 If the marginal propensity to save is 0.1, the marginal propensity to import is 0.1 and the marginal tax rate is 0.2, how much would consumption increase if income rises by £8billion? O a. 4.8 O b. 13.3 O c. 3.2 O d. 20 4Which of the following changes in personal income tax would lead to the smallest increase in consumption? O a. O b. a $15 000 decrease in taxes, if MPC equals 0.6 O c. a $30 000 decrease in taxes, if MPC equals 0.25 Oe. a $20 000 decrease in taxes, if MPC equals 0.5 O d. a $12 000 decrease in taxes, if MPC equals 0.75 a $10 000 decrease in taxes, if MPC equals 0.2
- In a model with demand-determined output and a constant price level, a decrease in the net tax rate causes in autonomous spending and a in the simple multiplier. O a. No change; rise. O b. A rise; fall. O c. No change; fall. O d. A rise; rise. O e. A fall; fall.A Moving to another question will save this response. Question 6 If a lump-sum income tax of $35 billion is levied and the MPS is 0.40, the consumption schedule will shift O A. upward by $21 billion. O B. downward by $14 billion. OC, downward by $21 billion. O D. downward by $35 billion. A Moving to another question will save this response.QUESTION 6 In the diagram below, what would happen if the government were to increase spending on goods and services? CWJ W O a. The line marked W would shift downwards and national income would move towards its equilibrium level O b. The line marked J would shift upwards and national income would move towards its equilibrium level O c. The line marked W would shift upwards and national income would move towards its equilibrium level O d. The line marked J would shift downwards and national income would move towards its equilibrium level
- Economics The marginal propensity to consume is 0.8, the marginal tax rate is 02. and the marginal propensity to import is 0.14. The price level is fixed. The autonomous tax muluplier is If the autonomous tax by the equilibrium real GDP by O A. decreases; 20, increases; 32 O B. increases; 12; increases: 30 O C. decreases; 20, increases; 60 OD. increases: 12; decreases, 30 O E. decreases; 30; decreases; 48 34Considering the equation 'AD=C+I+G+ NX,' an increase in personal income taxes will Select one: O a. decrease LRAS. O b. increase SRAS. O c. decrease AD. O d. increase AD.* Question Completion Status: YA Moving to another question will save this response. Question 7 Which of the following fiscal policy changes would be the most contractionary? O A. a $40 billion increase in taxes. O B. a $30 billion increase in taxes and a $10 billion cut in government spending. O C. a $20 billion increase in taxes and a $20 billion cut in government spending. O D.a $10 billion increase in taxes and a $30 billion cut in government spending. A Moving to another quastion willsve this responso