Macroeconomics Question Set
a.) The increase in expenditures necessarily causes government spending levels to rise, and this means that the aggregate demand curve moves to the right. When the presence of a multiplier effect or an investment accelerator is accounted for, aggregate demand shifts are more pronounced. Conversely, when crowding-out occurs, aggregate demand moves less.
) In this scenario, the multiplier is 1/(1 -- MPC) = 1/(1 -- .8) = 1/.2 = 5. When government expenditures are increased by $150 billion results in a shift of $750 billion in aggregate demand, because ($150 billion x 5) = $750 billion. By increasing taxes by $150 billion income levels decrease the same amount, and this initially decreases consumption by $120 billion, because ($150 billion x MPC) = ($150 billion x .8) = $120 billion. The subsequent change in consumption creates a...
Unemployment payments are intended to provide temporary financial relief, whereby eligible recipients are able to sustain until their situation improves. It is important to note that each state has a separate unemployment insurance program that must be within guidelines established by the federal law. Typically, a person is eligible if they have worked during a certain time frame known as a base, which is usually the first 4 of the
Macroeconomics Guyana -- Inflation Rate Inflation rate is an important concern to assess the economic condition of any country. This report focuses on the inflation rate of the South American country, Guyana. The economy of Guyana mainly depends upon the production of rice, sugar, shrimp, fresh fruits, vegetables and fish. The important industries of Guyana include mining of diamond, gold and bauxite, manufacturing of pharmaceuticals, footwear, clothing, beverage and foodstuff processing. In Guyana, inflation
Macroeconomics The legal power of the government to intervene in the economy is limited only by the Constitution, the willingness of Congress to pass laws, and the willingness of the executive branch to enforce them. Public Provision National defense, the criminal justice system, the public schools, the interstate highway system, air traffic control, and the national parks are all examples of goods or service that are directly provided by governments in the United
individuals are knowledgeable about macroeconomics. It is a huge and potentially difficult subject to understand, and yet its constructs intimately affect each and every aspect of our lives. To show that this is so, I plan to explain some of the factors of the current state of the U.S. macro economy so that we can gain a better understanding of their implications. I will address this topic by posing
Since G=T with a balanced budget, savings will still fall until I's again, but the expansion of government achieves the goal of replacing the shortfall in aggregate expenditures, albeit with new, higher taxes. In our case, the increased proceeds from taxes will have to amount to $30 million, in order to set-off the increase in government spending and to maintain the same GDP. The increase in government expenditures will fully
Thus it was confidence ebbed that had ebbed actual income. The Hiscox Wealth Review of 2009 found: "The recession has left its mark on the psyche of the Working Wealthy with a lack of confidence impacting their perceptions of wealth and appetite for risk. Whilst two in five (41%) say the recession has not had an impact on the amount of money they have to spend, almost an equal
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