43 refer to the diagram. the level of government spending

raise marginal tax rates and cut wasteful government spending: D) increase the rate of inflation above peoples' expectations: 7: Use the following diagram to answer the next question. (7.0K) Refer to the diagram. If the economy's tax rate is currently set at c, a decrease in the tax rate to b will: A) shift the curve to the right: B) increase ... S= -20 +.2 Yd. S= 20 + .8 Yd Refer to the above diagram. The average propensity to consume: is greater than 1 at all levels of disposable income above $100. is greater than 1 at all levels of disposable income below $100. is equal to the average propensity to save. cannot be determined from the information given.

As government spending is a component of aggregate demand, an increase in government spending will lead to an increase in aggregate demand; this can be demonstrated on the diagram by a shift rightwards of the AD curve. After drawing this in, all we have to do is refer to the diagram to see what has happened to the price level and Real GDP.

Refer to the diagram. the level of government spending

14. Refer to the above diagram. The average propensity to consume: A) is greater than 1 at all levels of disposable income above $100. B) is greater than 1 at all levels of disposable income below $100. C) is equal to the average propensity to save. D) cannot be determined from the information given. Answer: B 15. Refer to the above diagram. Diagram A may indicate an increase in government spending or a decrease in taxes to increase the level of output and income. d. Diagram B represents the net effect of a balanced budget, in other words where ↑G = ↑T with the same amount and the net effect will still be expansionary on the level of output and income. Increases in government spending will shift the AD curve to the right; decreases in government spending will shift the AD curve to the left. Changes in Net Exports unrelated to changes in the price There are two important factors unrelated to the price level that could increase or decrease the level of Net Exports and thereby shift the AD Curve.

Refer to the diagram. the level of government spending. Diagram 4.3: the IS curve is derived from the ZZ curve in the goods market model. By assuming a change in the interest rate which changes investment spending and shifts the ZZ curve which leads to a change in the level of output and income. A change in any of the autonomous or exogenous components of ZZ will shift the IS curve. ie c 0, Ī, G or cT The marginal propensity to consume in an economy is 0.90. Thus, if the price level is fixed, a $300 increase in government spending would be expected to increase real GDP by $3,000. Now suppose tha... Government would need to spend $29.4 to purchase the excess milk. Producer surplus with the price floor is: Producer surplus has increased by $10.4. The increase in producer surplus does not exceed government spending on milk. This increase in producer surplus is only 35% of the level of government spending on surplus milk. Diff: 2. Section: 9.3 The level of government spending. ... Refer to the diagram, which applies to a private closed economy. If aggregate expenditures are C + Ig2, the amount of saving at income level J is. KN. Other things equal, the slope of the aggregate expenditures schedule will increase as a result of.

23. Refer to the above diagram. If aggregate expenditures in this economy are (C + Ig + Xn2), then the equilibrium levels of GDP and aggregate expenditures respectively will be: A) 0A and 0E. B) 0B and 0F. C) 0A and AH . D) 0D and DJ . Answer: D 24. Refer to the above diagram. The change in aggregate expenditures Refer to the diagram, in which T is tax revenues and G is government expenditures. All figures are in billions. This diagram portrays the idea of A) progressive taxation. B) built-in stability. C) the multiplier. D) discretionary fiscal policy. a firm cannot vary its output level. all factors of production can be varied. a firm can change its fixed inputs. output is raised or reduced by changing the levels of variable inputs. Question 13.13. (TCO 4) Refer to the diagram. The phases of the business cycle from points A to D are, respectively: Graph Description (Points : 4) 53. Refer to the diagram for a private closed economy. At the equilibrium level of GDP, investment and saving are both A. $50. B. $100. C. $20. D. $40. 54. Refer to the diagram for a private closed economy. The $400 level of GDP is A. that output at which saving is zero. B. too high because consumption exceeds investment.

The Marginal Propensity to Consume is the extra amount that people consume when they receive an extra dollar of income. If in one year your income goes up by $1,000, your consumption goes up by $900, and you savings go up by $100, then your MPC = .9 and your MPS = .1. In general it can be said: Government Spending and Taxes as a Function of National Income. In the Keynesian cross diagram, government spending appears as a horizontal line, as in Figure, where government spending is set at a level of 1,300. As in the case of investment spending, this horizontal line does not mean that government spending is unchanging. 2. Refer to the diagram above. If; Question: Price Level LRAS SRAS - -- - - - - - - - - - AD Real GDP 1. Refer to the diagram above. At output level Ya the actual unemployment rate is greater than the natural rate of unemployment, the expected price level equals actual price level. aggregate demand will fall to restore equilibrium. A. a $10 billion tax cut B. a $10 billion increase in government spending C. a $10 billion tax increase D. a $10 billion decrease in government spending AS AD, AD2 AD, AD. Real GDP 29. Refer to the above diagram, in which Qr is the full-employment output.

Refer to the above diagram the equilibrium level of gdp is a y 5 b y 4 c y 3 d from econ 230 at johnson county community college. Level 4 analyze difficulty. The equilibrium output of such an economy is that level of output at which the total amount of planned spending is just equal to the amount produced or gdp.

132. Refer to the above diagram. The level of government spending: A) is equal to tax collections at each level of GDP. C) varies inversely with the level of GDP. B) is the same at all levels of GDP. D) varies directly with the level of GDP. Answer: B. Type: G Topic: 4 E: 183 MA: 183 133. Refer to the above diagram.

Government spending 1) Current expenditures " include wages and salaries of public sector employees as well as spending on consumables (day-to-day-items) such as stationery 2) Capital expenditures " refer to public investment spending, including all spending on infrastructure, construction roads, harbors, hospitals and schools

A reduction of net exports of $1,000 shifts the aggregate expenditures curve down by $1,000 to AE2. The equilibrium real GDP falls from $7,500 to $5,000. The new aggregate expenditures curve, AE2, intersects the 45-degree line at real GDP of $5,000. The multiplier is 2.5 [= (−$2,500)/ (−$1,000)].

D. Government spending policy has no ability to affect the level of output. 7 ... B. $300. C. $200. D. $100. 35. Refer to the above diagram for a private closed economy. At the equilibrium level of GDP, investment and saving are both: A. $50. B. $100.

It includes all four components of demand: consumption, investment, government spending, and net exports (exports minus imports). This demand is determined by a number of factors, but one of them is the price level—recall though, that the price level is an index number such as the GDP deflator that measures the average price of the things we buy.

Refer to the above diagram. If the full-employment level of GDP is D, then it would be appropriate fiscal policy for government to: a. decrease spending and increase taxes. b. decrease spending and decrease taxes. c. increase spending and increase taxes. d. increase spending and decrease taxes.

Refer to Extract B in your answer. (4) (c) Analyse why the global price of oil fell in the first quarter of 2020. Refer to Figure 1 and Extract A in your answer. Illustrate your answer with a supply and demand diagram. (6) (d) With reference to Extract A, examine two likely effects of the high level of indirect taxation on diesel and petrol in ...

Government Spending Government Spending Government spending refers to money spent by the public sector on the acquisition of goods and provision of services such as education, Operating Expenses Operating Expenses Operating expenses, operating expenditures, or "opex," refers to the expenses incurred regarding a business's operational activities.

____ 12. An increase in the price level causes the aggregate supply curve to shift to another supply schedule. ____ 13. Over time, aggregate demand and aggregate supply grow by the same amount. ____ 14. Fiscal policy is the use of taxes and spending by the government to affect aggregate demand. ____ 15.

Equilibrium. An economy will be in equilibrium, that is it will be in a stable state, when planned withdrawals equal planned injections; hence savings, taxation and import spending (S + T + M) will equal investment, government spending and export revenue (I + G + X). This is also consistent with planned aggregate demand equalling planned aggregate supply.

Increases in government spending will shift the AD curve to the right; decreases in government spending will shift the AD curve to the left. Changes in Net Exports unrelated to changes in the price There are two important factors unrelated to the price level that could increase or decrease the level of Net Exports and thereby shift the AD Curve.

Diagram A may indicate an increase in government spending or a decrease in taxes to increase the level of output and income. d. Diagram B represents the net effect of a balanced budget, in other words where ↑G = ↑T with the same amount and the net effect will still be expansionary on the level of output and income.

14. Refer to the above diagram. The average propensity to consume: A) is greater than 1 at all levels of disposable income above $100. B) is greater than 1 at all levels of disposable income below $100. C) is equal to the average propensity to save. D) cannot be determined from the information given. Answer: B 15. Refer to the above diagram.

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