AP Macroeconomics expenditure and tax multipliers question. PLEASE HELP ME!!!!?
The balanced budget multiplier concepts shows that the change in GDP will mirror the amount spent. Follow along: Change in GDP = spending multiplier * initial change in spending Spending multiplier = 1/mps OR 1/(1-mpc) So, X = 1/.25 * 300 X=4*300 X=1200 (spendings impact on GDP) HALFWAY DONE Now for the taxing side Change in GDP = taxing multiplier * initial change in taxes Taxing multiplier = -(mpc/mps) So, X=-.75/.25 * 300 X=-3*300 X=-900 Together: 1200-900=300 On to your second question: Again, Change in GDP = spending multiplier * initial change in spending 400 = 1/(1-mpc) * 80 5=1/(1-x) 5-5x=1 5x=4 X=4/5 OR .8
Macroeconomics help please!?
If real GDP is $400 billion, full employment GDP is $500 billion, and the marginal propensity to consume is 0.5, then Congress should decrease taxes by $50 billion. increase purchases by an amount slightly more than $100 billion. decrease purchases by $100 billion. decrease taxes by $100 billion. decrease purchases by $50 billion. A change in personal income taxes impact gross domestic product through a change in government spending. investment. autonomous consumption. disposable income. net exports. If the government increases personal taxes, then output will increase and price level will decrease. output will decrease and price level will increase. output and price level will increase. output and price level will decrease. output will increase and price level will be indeterminate. If real GDP is $400 billion, full employment GDP is $800 billion, and the marginal propensity to consume is 0.5, then Congress should decrease taxes by $200 billion. increase taxes by $400 billion. increase purchases by an amount slightly more than $200 billion. increase purchases by $200 billion. increase purchases by $400 billion. Explain the impact of an increase in personal income taxes on output and price level. The answer I put was: Output of goods and services needed by the government will increase to reflect the increase in government spending. This will hopefully stimulate the economy and lead to growth. The price level will remain fairly stable in all scenarios. However, my teacher said "If congress increases taxes, how does that change disposable income (DI)? You have to explain why AD shifts each time you use fiscal policy. See the lesson for help. I think you confused the questions." but I don't understand how to do it.
Please help on any of these economics questions you can! I need to understand these!!?
1)If real GDP is $200 billion, full employment GDP is $500 billion, and the marginal propensity to consume is 0.75, then Congress should 1) decrease taxes by $50 billion. 2) increase government purchases by $50 billion. 3) decrease government purchases by $50 billion. 4) decrease taxes by $100 billion. 5) increase government purchases by $300 billion. 2)A change in personal income taxes impact gross domestic product through a change in 1) government spending. 2) investment spending. 3) autonomous consumer spending. 4) disposable income. 5) net exports. 3)The government of an economy in equilibrium above potential output should 1) increase taxes to close the inflationary gap. 2) decrease taxes to close the inflationary gap. 3) increase spending to close the inflationary gap. 4) decrease spending to close the recessionary gap. 5) decrease taxes to close the recessionary gap. 4)Assume an economy in long-run equilibrium. If there is a rise in the stock market that increases the value of stocks held by households, which of the following will be true? I.Inflationary gap develops. II.Recessionary gap develops. III.Expansionary policy should be used to return the economy to equilibrium. IV.Contractionary policy should be used to return the economy to equilibrium. V.Economy remains in long-run equilibrium. 1) V only. 2) I and III only. 3) II and III only. 4) I and IV only. 5) II and IV only.
HELP WITH ECON PLEASE!!!?
The perfectly elasticated curve of nonsense is fully aggravated by senseless shame and unknown forces, written once by he but not by them. Sit on the purple earth, say hi low to the strange fog then twist up and think. Why, no what is that, not me, but some other.