Suppose the government increased spending 25,000,000, that there is no crowding out, and that marginal propensity to consume is 0.8. What is the change in GDP that results from this increase in government spending? (Use a positive number if GDP goes up and a negative number if GDP goes down)
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- 1. If imports are $2 trillion, exports are $1.9 trillion, consumption is $3.8 trillion, investment is $700 billion, and government spending is $1.1 trillion, how much is GDP? 2. If consumption is $2.5 trillion, investment is $900 billion, government spending is $700 billion, imports are $1.2 trillion and exports are $1.4 trillion, how much is GDP? Example: If GDP rises from $6 trillion in 1994 to $8 trillion in 1999 and the GDP deflator in 1999 is 110, find real GDP in 1999 and find the percentage increase in real GDP between 1994 and 1999. First, we are asked to find real GDP in 1999. To do this we divide the nominal GDP, which is $8 trillion ($8,000 billion), by the GDP deflator for 1999, which is 110. This then is multiplied by 100. Real GDP in 1999 is $7,273 billion or $7.2 trillion. To find the percent change you must find the difference of real GDP between 1999 and 1994. Change in GDP = 7,232 – 6,000 = 1,232 You then take this difference and divide it by GDP in…不 Fill in the missing values in the following table. Assume that the value of the MPC does not change as real GDP changes and that there are zero taxes. (Enter all values as whole numbers.) Real GDP () Consumption (C) Planned Investment (/) Government Purchases (G) Net Exports (NX) $15,000 $10,500 $1,500 $1,300 - $375 $16,000 $11,200 $1,500 1,300 - $375 $17,000 $1,500 1,300 - $375 $18,000 $1,500 1,300 - $375 $19,000 $ $1,500 1,300 - $375C= 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.)
- 17. Suppose MPC = 0.6, and G increases by $350 and Tax increases by $350 simultaneously. How much would GDP change? (NOTE: Refer to your answers from #14 & #15) 18. Suppose MPC = 0.8, and the government intends to increase GDP by $300. To achieve the goal, tax must (increase decrease ) by $How do budget surpluses and budget deficits affect the consumption and investment components of GDPSuppose you have the following information about a fictitious economy. Assume there are no taxes in this economy. Disposable Income and Consumption Disposable Income Consumption (dollars) $12,000 20,000 28, 000 (dollars) 12,000 24,000 36,000 36, 000 48, 000 44 ,000 60, 000 52,000 Instructions: In parts a and c, enter your answers as a whole number. In part b, round your answers to 2 decimal places. a. What is the equilibrium level of consumption? b. What is the MPC and MPS for this economy? MPC: MPS: c. What is the value of autonomous consumption for this economy?
- Suppose an economy with the following characteristics.Y = Real GDP or national incomeT = Taxes = 0.3YC = Consumption = 140 + 0.9(Y – T)I = Investment = 400G = Government spending = 800X = Exports = 600M = Imports = 0.15YGiven the information above What is the equation for Aggregate Expenditures (AE) in this economy?You are told that taxes in this economy are equal to 100. What is the value of autonomous consumption? Planned Government Net Exports Aggregate Change in Real GDP (Y) Consumption (C) Investment (1') Purchases (G) (NX) Expenditures (AE) Inventories 1500 1100 250 1600 1175 100 1700 1250 1800 1900 2000 75 Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a 50 75 100 d. 125In the economy of Kwartengland, the following figures are given for economic activity which was undertaken in 2013. All the figures are million Ghana Cedis Consumption Expenditure = 1000 + 0.8 YD Investment Spending= 600 Government Expenditure = 2450 Personal Taxes= 100 Exports= 100 Imports= 150 1. Calculate the investment and tax multipliers 2. By how much should exports change if government wishes to increase real GDP by 1000?
- 2) GDP (Y) = $1,200, consumption (C) = 150, exports (X) = 50, investment (I) = 125. What is government spending (G)? (Assume M= 0) (Show your math calculation)suppose the government wishes to illuminate recessionary of a gdp of 100 billion in the MPC is .075. How much must the government increase in spending? Instead of increasing government spending by the amount you calculated what would be the effect of the government decreasing taxes by this amount explain?Suppose a government collects $12 billion in various tax revenues and pays $2.5 billion in debt interest, $9 billion in social security benefits and $0.5 billion in government employee wages. What is the direct contribution to GDP coming from this government's fiscal actions? a. $3.0 billion. b. $0.5 billion. C. $11.5 billion. d. $2.5 billion. e. $12.0 billion.
