Suppose the government raises its revenue by a net tax of 40
percent on income, t = 0.4. The marginal propensity to consume out
of disposable income is 0.9 and the marginal propensity to import
is 0.25.
Note: Keep as much precision as possible during
your calculations. Your final answer should be accurate to at least
two decimal places.
a) What is the slope of the AE function? What is
the size of the multiplier?
Slope of AE = 0Multiplier = 0
b) Autonomous expenditure by the household and
business sectors (C + I) is 300, government expenditure is 400,
exports are 60 and imports are 40. What is the autonomous
expenditure and equilibrium output? What is the government's budget
balance?
Autonomous Expenditure = 0Equilibrium Real GDP = 0Government Budget Balance = 0
c) The government increases its expenditures by
100 to provide additional funding for national defense. What is the
effect on equilibrium income and output? What is the effect on the
net tax revenue?
Equilbrium income
(Select here)
by
0
and the net tax revenue
(Select here)
by
0
.
d) What is the government's new budget
balance?
Government New Budget Balance = 0
Suppose the government raises its revenue by a net tax of 40
percent on income, t = 0.4. The marginal propensity to consume out
of disposable income is 0.9 and the marginal propensity to import
is 0.25.
Note: Keep as much precision as possible during
your calculations. Your final answer should be accurate to at least
two decimal places.
a) What is the slope of the AE function? What is
the size of the multiplier?
Slope of AE = 0Multiplier = 0
b) Autonomous expenditure by the household and
business sectors (C + I) is 300, government expenditure is 400,
exports are 60 and imports are 40. What is the autonomous
expenditure and equilibrium output? What is the government's budget
balance?
Autonomous Expenditure = 0Equilibrium Real GDP = 0Government Budget Balance = 0
c) The government increases its expenditures by
100 to provide additional funding for national defense. What is the
effect on equilibrium income and output? What is the effect on the
net tax revenue?
Equilbrium income
(Select here)
by
0
and the net tax revenue
(Select here)
by
0
.
d) What is the government's new budget
balance?
Government New Budget Balance = 0
Suppose the government raises its revenue by a net tax of 40
percent on income, t = 0.4. The marginal propensity to consume out
of disposable income is 0.9 and the marginal propensity to import
is 0.25.
Note: Keep as much precision as possible during
your calculations. Your final answer should be accurate to at least
two decimal places.
a) What is the slope of the AE function? What is
the size of the multiplier?
Slope of AE = 0Multiplier = 0
b) Autonomous expenditure by the household and
business sectors (C + I) is 300, government expenditure is 400,
exports are 60 and imports are 40. What is the autonomous
expenditure and equilibrium output? What is the government's budget
balance?
Autonomous Expenditure = 0Equilibrium Real GDP = 0Government Budget Balance = 0
c) The government increases its expenditures by
100 to provide additional funding for national defense. What is the
effect on equilibrium income and output? What is the effect on the
net tax revenue?
Equilbrium income
(Select here)
by
0
and the net tax revenue
(Select here)
by
0
.
d) What is the government's new budget
balance?
Government New Budget Balance = 0
The answers are given below:
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