"ou are provided with the following information about an economy: Government spending, G = $ 50 Consumption function, C = $16 + 0.75(1-t)Y Investment, I = $34 Exports, X = $30
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- Assume that the economy is now governed by a government and begins trading with other economies. The economy is described by the following set of equations. ?=1000+0.5⋅?d ID = 600 G=700 T=400 EX=0.1⋅Y IM=100+0.1⋅Y YD = Y - T Calculate the equilibrium level of output Y* a) 2857 b) 4000 c) 6274 d) 4400 Whats the government expenditure multiplier? Whats the tax multiplier? Whats the ba;anced budget multiplier?C = 450 + 0.4Y I = 350G = 150X = 70Z = 35 + 0.1Y T = 0.15YYf = 1550Calculate the tax revenue to the government of this country when the economy (2) remains in equilibrium.Calculate what the new equilibrium income should be if the government of this (6) country decides to cancel all taxes, implying the tax rate would now be 0%.Before the government decreased the tax rate, how much of government spending was required to bring the economy to full employment?The President of Westeros hires you as an economic consultant. He is concerned that theoutput level in Westeros is too high and that this will cause prices to rise. He feels that it isnecessary to reduce output by $10 billion. He tells you that the MPC in Westeros is 0.6.Which of the following would be the best advice to give to the Westeros president?A) reduce government purchases by $4 billionB) increase taxes by $10 billionC) reduce government purchases by $10 billionD) increase taxes by $2.5 billion
- An economy is described by the following equations: C = 500 + 0.85(Y – T), Cis consumption, Y is income and T is taxation M=0.05(1-t)Y imports IP = 1500, planned investment G = 400, government spending T = tY, t = 0.2 is the marginal tax rate X = 1200, X is exports I. The equilibrium level of output for the above economy is 22500 Do NOT include any letters, spaces or symbols (e.g. "$" or ",") in your answer. II. The multiplier for this economy is equal to 6.67 (Round to 2 decimal places) III. Suppose that, in this economy, there is an exogenous decrease in spending of 180. This economy will now be experiencing expansionary gap. Possible answers (write ONE of the following only): "a contractionary" OR "an expansionary". IV. If the potential output of the economy is 10,000, the size of the output gap arising from part III will be Do NOT include any letters, spaces or symbols (e.g. "$" or ",") in your answer. V. If the Okun's Law beta parameter is 2, the cyclical unemployment rate…The table below provides information for the economy of Zawi. C = 50+ 0.65Y I = 135 Y 22 0.15Y a. The value of equilibrium income is $ b. Set up a balancing row to verify your calculations (the tax equation is T = 70+ 0.2Y and X = 215). Enter your responses as whole numbers. T XN G = 240 YD C S c. If exports decrease by 30, the new equilibrium income is $ I G X IM XN AEThe table below provides information for the economy of Zawi. C = 40 + 0.62Y Хм 16 - 0.12Y I = 100 G = 220 a. The value of equilibrium income is $ b. Set up a balancing row to verify your calculations (the tax equation is T = 60 + 0.3Y and X = 205). Enter your responses as whole numbers. Yp G IM XN AE c. If exports decrease by 40, the new equilibrium income is $
- C = 450 + 0.4YI = 350G = 150X = 70Z = 35 + 0.1YT = 0.15YYf = 1550(Hint: use the multiplier method)Q.2.4 Calculate the tax revenue to the government of this country when the economyremains in equilibrium.Q.2.5 Calculate what the new equilibrium income should be if the government of thiscountry decides to cancel all taxes, implying the tax rate would now be 0%.Q.2.6 Before the government decreased the tax rate, how much of governmentspending was required to bring the economy to full employment?Given: C= 400 + .6Yd. Taxes = 600 Equilibrium Output = 4,000 At equilibrium, what is the sum of investment and government purchases in this economy?What is a surplus unit? What is a deficit unit?
- An economy has the following characteristics: Y = National income Taxes = T = 0.25Y C = Consumption = 400+ 0.85(Y – T) 1 = 300 G = 200 (Exports) X = 500 (Imports) M = 0.1(Y – T) Find the equilibrium for this economy. If potential GDP is 3,500, then what change in government spending is needed to achieve this level? Do this problem two ways. Either plug 3,500 into the equations and solve for G, or calculate the multiplier and figure it out that way.Using the ZZ/Y and NX graphs, illustrate graphically and explain what effect an increase in taxes will have on output, exports, imports, and net exports. Clearly label all curves as well as the initial and final equilibria. (100 words max)This question doesn't provide any graph and other information. The question is: using the domestic goods demand and net exports graphs, illustrate graphically and explain the effects of a decrease in taxes on output, exports, imports, and net exports. Label all the curves, the initial and new equilibrium points. Please draw the graph too